Toward an understanding of tax amnesty take-up: Evidence from a natural field experiment

Patricia Gil, Justin Holz, John List, Andrew Simon and Alejandro Zentner

Journal of Public Economics, 2024, vol. 239, issue C

Abstract: Governments often use partial forgiveness policy to induce debt repayments and increase the disclosure of hidden debts. While ubiquitous, much remains unknown about how well these amnesties work, for whom, and why. We partnered with the Dominican Republic Tax Authority to design a natural field experiment to understand whether, and what types of, nudges can increase amnesty take-up and repayment. Our field experiment, which covers 125,452 taxpayers collectively owing 5.5% of GDP in known debt, tests the impact of messages from the tax authority during an amnesty that highlight deterrence laws, beliefs about future amnesties, and tax morale messages for debt payment and disclosure. Importantly, we find large short-run effects – our most effective treatment increased payments of known debt by 25% and hidden debt by 48% – that are only slightly undone by reductions in subsequent tax payments.

Keywords: Tax compliance; Tax amnesty; Natural field experiment (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:239:y:2024:i:c:s0047272724001816

DOI: 10.1016/j.jpubeco.2024.105245

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