Work

How to Improve Tax Compliance? Evidence from Population-Wide Experiments in Belgium

Year: 2020

Type: article

Abstract: We study the impact of simplification, deterrence, and tax morale on tax compliance. We ran four natural field experiments varying the communication of the tax administration with the universe of income taxpayers in Belgium throughout the tax process. A consistent picture emerges across experiments: (i) simplifying communication substantially increases compliance, (ii) deterrence messages have an additional positive effect, (iii) invoking tax morale is not effective and often backfires. A discontinuity in enforcement intensity, combined with the experimental variation, allows us to compare simplification with standard enforcement measures. We find that simplification is far more cost-effective, allowing for substantial savings on enforcement costs.

Source: Journal of Political Economy

DOI: 10.1086/713096

Authors: Jan-Emmanuel De Neve, Clément Imbert, Johannes Spinnewijn, Teodora Tsankova, Maarten Luts

Institutions: University of Oxford, University of Warwick, London School of Economics and Political Science, Tilburg University

Language: English

Topic: Taxation and Compliance Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

Funder: Economic and Social Research Council