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How to improve tax compliance? Evidence from population-wide experiments in Belgium
De Neve,Jan-Emmanuel Imbert,Clement Spinnewijn ,Johannes Tsankova,Teodora Luts,Maarten
De Neve,Jan-Emmanuel
Imbert,Clement
Spinnewijn ,Johannes
Tsankova,Teodora
Luts,Maarten
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.
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2021-05
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DISTL_draft.pdf
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Keywords
tax compliance, field experiments, simplification, enforcement, C93 - Field Experiments, D91 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making, H20 - General
Citation
De Neve, J-E, Imbert, C, Spinnewijn , J, Tsankova, T & Luts, M 2021, 'How to improve tax compliance? Evidence from population-wide experiments in Belgium', Journal of Political Economy, vol. 129, no. 5, pp. 1425-1463. https://doi.org/10.1086/713096