The role of information in tax compliance: Evidence from a natural field experiment

Tuomas Kosonen and Olli Ropponen

No 48, Working Papers from VATT Institute for Economic Research

Abstract: It is challenging to distinguish the role of information in tax compliance from other factors affecting it. This paper utilizes a novel natural field experiment design to study the issue. In the experiment firms reporting their VAT were sent a letter asking them questions about their attitude towards the tax authority. The introductions to the questions provided candid information about VAT rules for a randomized treatment group, while a randomized control group was only asked questions without additional information. We observe the effects of the treatments directly from firm-level tax records. Providing information did reduce the noncompliance in tax reporting, which indicates that there were unintentional errors. The experimental design also allows us to study whether the difficulty and novelty of the tax code plays any role in tax compliance. The results indicate that tax reporting changes when new and easy information is provided.

Keywords: Tax compliance; Information; Field experiment; Taxation; Verotus; Taxation and Social Transfers; Julkisen talouden rahoitus ja tulonsiirrot; C930 - Field Experiments; H250 - Business Taxes and Subsidies including sales and value-added (VAT); H260 - Tax Evasion (Compliance; Collection) (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-exp, nep-iue and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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https://www.doria.fi/handle/10024/148787

Related works:
Journal Article: The role of information in tax compliance: Evidence from a natural field experiment (2015)
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