Who’s calling? The effect of phone calls and personal interaction on tax compliance

Monica Mogollon Plazas, Daniel Ortega () and Carlos Scartascini
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Daniel Ortega: Development Bank of Latin America (CAF) and IESA

International Tax and Public Finance, 2021, vol. 28, issue 6, No 2, 1302-1328

Abstract: Abstract Most tax agencies use letters as the method of communicating with taxpayers. Still, other technologies exist that could be more effective. This paper reports the results of a field experiment conducted by the National Tax Agency of Colombia (DIAN), using phone calls to reduce tax delinquencies. DIAN randomly assigned 34,000 tax debtors to a phone call operation using a fixed script to communicate existing debts and invite taxpayers to a meeting at the local tax agency office. Phone calls were very effective to increase collection of unpaid taxes. Conditional on the phone call being made, the effect on the treatment is about 25 percentage points higher than the control group (about a fivefold increase). We also find suggestive evidence that the personal interaction seems to be an important channel for explaining taxpayers’ behavior. Faced with a tax agent, taxpayers tend to commit to attending the meeting and paying the tax owed. However, many taxpayers who commit do not make payment effective. The findings complement a nascent literature that shows that there are plenty of gains from innovating in the communication strategy. They also indicate that personal interactions are important, but they have to be paired with easy-to-follow and immediate actions. Paying taxes is easier said than done.

Keywords: Tax evasion; Field experiment; Method of communication; Public policy; Tax delinquencies; Enforcement; Reminders; Tax morale (search for similar items in EconPapers)
JEL-codes: C93 D62 H23 H42 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Who's Calling?: The Effect of Phone Calls and Personal Interaction on Tax Compliance (2019)
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DOI: 10.1007/s10797-021-09655-4

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