Nudging Taxpayer Registration?: Field Experimental Evidence on Backfiring Incentives

Huáscar Eguino, Soraya Roman and Simeon Schächtele

No 10812, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: Governments in Latin America raise little revenue from property taxation, despite arguments for its efficiency and equity. Adequate registry information would support consistent collection, but registries are costly to establish and maintain. Compared to tax collection, field experimental evidence on low-cost interventions in this area is scarce. This paper provides the first such evidence for online tax registration. The municipality of Fortaleza, Brazil, randomized 163K property taxpayers into three groups. The first group represents the status quo that did not receive a particular treatment. To the second group, the tax administration sent an e-mail asking for registration; to the third group, an e-mail that additionally offered a lottery reward for successful registration. Relative to the first group, both e-mails increased registration, especially among compliant taxpayers, men, intermediate age groups and intermediate property values. But adding the lottery incentive had a negative effect on registration. We hypothesize that this backfiring effect relates to an inadvertent signal about non-enforcement. Additional evidence from a post-experimental survey suggests that for taxpayers in the lottery group, norm compliance and the usefulness of the online registry were less important reasons to register. In sum, the results suggest that the intervention prompted parts of the population to register and that monetary incentives may be counterproductive.

Keywords: Brazil; Field experiment; Tax compliance; nudge; local public finance; tax registry; lottery incentives; propertytax (search for similar items in EconPapers)
JEL-codes: C93 D83 D91 H26 K42 (search for similar items in EconPapers)
Date: 2020-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publications.iadb.org/publications/english ... iring-Incentives.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:10812

DOI: 10.18235/0002827

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().