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Nudging for Tax Compliance: A Meta-Analysis

Armenak Antinyan and Zareh Asatryan

No 8500, CESifo Working Paper Series from CESifo

Abstract: Tax compliance nudges are used increasingly by governments because of their perceived cost-effectiveness in raising tax revenue. We collect about a thousand treatment effect estimates from 45 randomized controlled trials, and synthesize this rapidly growing literature using meta-analytical methods. We show that interventions pointing to elements of individual tax morale are on average ineffective in curbing tax evasion (when evaluated against a control group of taxpayers receiving neutral communication). In contrast, deterrence nudges - interventions emphasizing traditional determinants of compliance such as audit probabilities and penalty rates - increase compliance. However, their effects are modest in magnitude increasing the probability of compliance by 1.5-2.5 percentage points more than non-deterrence nudges. Our additional results suggest that nudges i) work better on sub-samples of late payers and when delivered in-person, ii) are less effective in the long-run and in lower-income countries, and iii) are somewhat inflated by selective reporting of results.

Keywords: tax compliance; randomized control trials; nudging; tax morale; meta-analysis (search for similar items in EconPapers)
JEL-codes: C93 D91 H26 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-acc, nep-exp, nep-iue, nep-law and nep-pbe
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Working Paper: Nudging for tax compliance: A meta-analysis (2019) Downloads
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