Political connections, corruption and tax evasion: a cross-country investigation Hichem Khlif and Ines Amara Faculty of Economics and Management of Sfax, University of Sfax, Sfax, Tunisia Abstract Purpose – This paper aims to examine the association between political connections and tax evasion and test whether corruption level affects this relationship. Design/methodology/approach – Tax evasion measure is based on Schneider et al. (2010), while country’s political connection trend is based on Faccio (2006). Findings – Using a sample of 35 countries, the authors document that political connections are positively associated with tax evasion and this relationship becomes stronger for high corrupt environment. Originality/value – The findings have policy implications for countries aiming to combat tax evasion as political connection trends in one country reduce the level of tax compliance. In addition, political connections and corruption play a complimentary role in increasing tax evasion practices. Keywords Corruption, Tax evasion, Political connections Paper type Research paper 1. Introduction Both political connections and tax evasion have attracted a great deal of attention among policymakers as widespread phenomena that may adversely affect the economic development in one country. Research concerning the importance of political connections as a determinant of tax evasion is important as very little is currently known about this association at country level. Some studies have examined the effect of political connections on tax avoidance (Adhikari et al. , 2006 in Malaysia), tax aggressiveness (Kim and Zhang, 2016 in USA), or on the capability of the state to enforce tax legislations (Lin et al., 2017 in China) at firm level. All these empirical enquiries have documented that political connections have an adverse effect on tax compliance behaviour through more tax avoidance, more tax aggressiveness practices and less effective enforcement of tax compliance by State tax authorities. However, there is no empirical evidence concerning the linkage between political connections and tax evasion using cross-country dataset. Accordingly, this study tries to complement the above streams of research by exploring the direct effect of political connection on tax evasion at country level. In addition, it tests whether corruption level moderates such a relationship. By doing so, our paper extends also previous literature dealing with the determinants of tax evasion initiated by Riahi-Belkaoui (2004)[1]. Understanding the economic consequence of political connections on tax evasion is crucial for governments that have an objective to fight or reduce tax evasion practices. Political connection trends in one country are proxied using the seminal work of Faccio (2006) dealing with political connections at country level, while tax evasion is measured using Schneider et al. (2010). Based on sample of 35 countries, we provide evidence that countries characterised by high level of political connections have higher levels of tax Corruption and tax evasion 401 Journal of Financial Crime Vol. 26 No. 2, 2019 pp. 401-411 © Emerald Publishing Limited 1359-0790 DOI 10.1108/JFC-01-2018-0004 The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/1359-0790.htm