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

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

Journal of Political Economy, 2021, vol. 129, issue 5, 1425 - 1463

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.

Date: 2021
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Related works:
Working Paper: How to improve tax compliance? Evidence from population-wide experiments in Belgium (2021)
Working Paper: How to improve tax compliance? Evidence from population-wide experiments in Belgium (2021)
Working Paper: How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium (2020)
Working Paper: How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium (2020)
Working Paper: How to improve tax compliance? Evidence from population-wide experiments in Belgium (2019)
Working Paper: How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium (2019)
Working Paper: How to improve tax compliance? Evidence from population-wide experiments in Belgium (2019)
Working Paper: How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium (2019)
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