The Formation of Citizens’ Financial Literacy as a Factor in the Development of Tax Culture
The formation of citizens’ financial literacy is one of the key factors in the effective implementation of tax and budget policy and plays an important role in improving tax culture. This process is particularly important in the transition to a non-cash payment system, ensuring the financial stability of the state and promoting economic development. Therefore, the Head of State instructed the Government of the country, relevant ministries, and agencies to implement effective measures aimed at increasing the level of financial literacy and tax culture among citizens [1].
Financial literacy, which refers to citizens’ ability to manage financial resources and understand the financial system, together with tax culture — meaning a conscientious attitude toward fulfilling financial obligations — contributes to the stability of society. These two concepts are directly interconnected because taxes are the main source of state budget revenues, and their emergence is closely associated with the formation of the state.
For this reason, scientific and educational literature considers taxes as one of the fundamental and mandatory characteristics of the state.
Social relations arising from the establishment and collection of taxes are regulated by the norms of tax law (a sub-branch of financial law). These norms are reflected in various regulatory legal acts and include three structural elements:
1. Hypothesis — expressed in the generally binding and compulsory nature of taxes when receiving certain income, profit, or acquiring property. It is a part of the legal norm that defines the category of persons to whom the legal rule applies, as well as the circumstances under which it becomes applicable.
2. Disposition — the part of the legal norm that contains the requirements established by the state. This rule becomes effective when the conditions specified in the hypothesis of the tax norm arise.
3. Sanction — the third element of the tax law norm, which provides for unfavorable consequences that arise when a taxpayer violates the requirements of the legal norm (for example, the obligation to pay a fine).
The combination of these legal norms forms the legal basis of tax relations and ensures their implementation.
Thus, tax legal relations are understood as financial public relations arising in connection with the establishment, introduction, and collection of taxes and duties into the budget system from individuals and legal entities, as well as during tax control and in cases of violations of tax legislation. These relations are regulated by tax law.
Improving financial literacy enables participants in these relations to properly understand their rights and obligations and contributes to the voluntary fulfillment of legal requirements within the framework of tax culture.
In this regard, tax legislation stipulates that when establishing taxes, all elements of taxation must be determined, including the object of taxation, tax base, tax rate, tax period, procedure for calculating taxes, procedures and deadlines for tax payments, as well as tax benefits and grounds for obtaining (using) them by taxpayers in cases provided for by the Tax Code of the Republic of Tajikistan.
Taxpayers are individuals and legal entities who, in accordance with the Tax Code of the Republic of Tajikistan, are responsible for paying taxes. According to the established procedure of the Tax Code of the Republic of Tajikistan, separate divisions of legal entities fulfill the tax payment obligations of these entities at the location of such separate divisions [2].
Society’s attitude toward taxes is reflected in its tax culture, which is based on understanding the objective necessity of taxation and the attitude of citizens toward paying taxes. A high level of tax culture is considered a guarantee of successful development and prosperity of the state.
One of the effective means of increasing tax revenues to the state budget is the implementation of a set of measures aimed at creating a favorable environment for the development of the tax system, including legislative, economic, and cultural institutions.
Therefore, the formation of taxpayers’ tax culture, based on voluntary compliance with tax legislation, is a complex process. Tax culture consists of understanding the importance of paying taxes for the state and society (as part of political culture) and citizens’ awareness of their rights and obligations (as part of legal culture), which together form tax culture.
Increasing tax literacy and tax culture among participants in tax relations is impossible without recognizing that the taxpayer is a partner of the state.
An important factor in developing tax culture is respectful treatment of taxpayers’ problems. In this regard, the following directions for effective development of tax culture are considered appropriate:
1. Increasing public trust and awareness of the economic importance of tax authorities as one of the important and promising state institutions.
2. Strengthening the work of territorial tax inspectors in their respective areas in order to clarify information about taxpayers’ locations, the existence of taxable objects, identify citizens engaged in illegal entrepreneurial activities, and conduct explanatory and awareness-raising activities among the population.
3. Encouraging voluntary tax payments through economic, administrative, and psychological methods. Increasing the level of tax culture among all participants in tax relations contributes to changing attitudes toward tax regulators.
Tax optimization, as an important methodological approach, should not be considered by tax authorities as unlawful behavior by taxpayers, and economic transactions conducted within the framework of legislation for the purpose of tax optimization should not be unjustifiably declared invalid.
4. Developing a strategy for the formation of tax culture. The absence of targeted concepts aimed at increasing tax literacy and developing tax culture among the population has resulted in the use of complex tax avoidance methods being perceived by some taxpayers as an achievement. Improving tax culture requires a clearly defined strategy.
Balancing the interests of the state and taxpayers, aimed at establishing partnership relations between them, forms a strong foundation for tax culture. It is noteworthy that, in practice, partnership relations in the tax sphere are considered unusual by some researchers.
The state, represented by tax authorities, using various mechanisms of compulsory tax collection, suppresses taxpayers’ dissatisfaction through its administrative authority. For tax authorities, such an approach ensures a relatively successful solution to the issue of tax collection [3].
It should be noted that the state, using its political power, makes tax payment mandatory for all taxpayers in order to ensure budget financing and defines it as an individual, non-equivalent (gratuitous) obligation.
By paying taxes, the taxpayer permanently loses the corresponding funds and has no right to demand their return. At the same time, the state is not obliged to return the funds received in the form of taxes to the taxpayer [4].
Therefore, the formation of citizens’ financial literacy and tax culture is a key factor in economic stability, as taxes are the main source of the state budget and an essential feature of statehood.
A proper understanding of taxation elements creates a foundation for partnership relations and ensures that tax legal relations are implemented within the framework of law and with a high level of responsibility.
MIRZOZODA MEHRIDDIN SAYFIDDIN
Leading Specialist of the Department of Legislation on Finance, Taxes, Customs Affairs and Banking Activities
National Center for Legislation under the President of the Republic of Tajikistan
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Abdulloev F.R., Kholkhudjaev Z.I. Financial Law (Educational and Methodological Complex). Dushanbe: “Ozar”, 2014. — 384 p.
Salimova M.M. Problems of Improving Tax Culture in the Republic of Tajikistan [Electronic resource]. Available from: muammo-oi-baland-bardoshtani-far-angi-andoz-dar-um-urii-to-ikiston (2).pdf (accessed: 09.04.2026).
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