Improving Tax Compliance without Increasing Revenue : Evidence from Population-Wide Randomized Controlled Trials in Papua New Guinea
This paper studies the impact of “nudges” on taxpayers with varying tax compliance histories in Papua New Guinea. It presents the results from two population-wide randomized controlled trials in a setting that is characterized by low compliance rat...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/481521612810264789/Improving-Tax-Compliance-without-Increasing-Revenue-Evidence-from-Population-Wide-Randomized-Controlled-Trials-in-Papua-New-Guinea http://hdl.handle.net/10986/35131 |
| Summary: | This paper studies the impact of
“nudges” on taxpayers with varying tax compliance histories
in Papua New Guinea. It presents the results from two
population-wide randomized controlled trials in a setting
that is characterized by low compliance rates and a lack of
effective enforcement. The study tests the impact of text
messages, flyers, and emails that remind taxpayers of
declaration due dates and provide information about the
public benefits of paying tax. The findings show that the
treatments increased the number of tax declarations filed
without increasing the amount of tax paid because the
taxpayers who responded to the nudges were largely exempt
from paying tax. This result is consistent across tax types,
communication channels, and time periods. The findings also
show that the treatments had no impact on previously
non-filing taxpayers. Collectively, the results illustrate
that taxpayers who face the lowest cost from complying are
the most likely to respond to a nudge. |
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