For Russia to become a socially oriented country its population should be kept well informed about the current tax legislation. The article discusses the concept of tax awareness and its relation to the concept of tax culture. The author describes the measures necessary to raise tax awareness in the Russian society, which involves increasing the population’s knowledge about tax legislation and identifying the factors preventing people from paying their taxes on time and in full. Raising tax awareness is also linked to enhancement of financial literacy among various age and gender groups with different tax status. Conceptually, this research is based on the attribution theory, planned behaviour theory and the social learning theory. The author sought to prove the hypothesis that the state is not interested in increasing the population’s tax literacy, which is one of the main components of financial literacy, because the government is incapable of answering the questions: how can citizens exercise their right to free education, free health care and social benefits, and who is actually entitled to these services and benefits? Methodologically, the research included a survey of heterogeneous social groups with different age, gender, social and tax status: young people, students, employed population, retirees, tax residents and foreign nationals. The article outlines measures that can keep people informed about tax legislation. Respondents were asked to rank these measures on a scale of one to five according to their importance. The article also describes the factors preventing law abiding citizens from paying taxes to budgets of different levels. These are the factors that tax authorities and the Ministry of Finance should be dealing with in the first place. Highlights The taxpayers should not be forced or bullied into performing their duties but instead they should be treated by the state as equal partners Tax authorities should conduct a well-organized campaign promoting responsible taxpaying and explaining why it is important It is shown that tax awareness of the population depends on people’s tax mentality and tax morality, which constitute tax culture For citation Koretskaya-Garmash V. A. Taxation Awareness and its Impact on Financial Literacy. Journal of Tax Reform, 2017, vol. 3, no. 2, pp. 131–142. DOI: 10.15826/jtr.2017.3.2.036 Article info Received May 7, 2017; accepted June 20, 2017