Does the opportunity to voice your opinion on the tax system give tax payers agency and increase tax compliance? A randomized field experiment.

We study extrinsic and intrinsic motivations for tax compliance in the context of a local church tax in Germany. This tax system has historically relied on zero deterrence so that any compliance at baseline is intrinsically motivated. Starting from this zero deterrence baseline, we implement a field experiment that incentivized compliance through deterrence or rewards. Using administrative records of taxes paid and true tax liabilities, we use these treatments to document that intrinsically motivated compliance is substantial, that a significant fraction of it may be driven by duty-to-comply preferences, and that there is no crowd-out between extrinsic and intrinsic motivations. (JEL C93, D64, H26, H71, K34, Z12)

Download Full-text

MENINGKATKAN KEPATUHAN DAN PENERIMAAN PAJAK MELALUI WITHHOLDING TAX SYSTEM

InFestasi ◽

10.21107/infestasi.v12i2.2769 ◽

2017 ◽

Vol 12 (2) ◽

pp. 203

Author(s):

I Nyoman Darmayasa ◽

Yuyung Rizka Aneswari ◽

Elana Era Yusdita

Keyword(s):

Tax Compliance ◽

Assessment System ◽

Third Party ◽

Self Assessment ◽

Tax Base ◽

Tax System ◽

Withholding Tax ◽

Tax Payers ◽

Economic Capacity ◽

Method Approach

The research aimed to understand deeply about withholding tax system in Indonesia and propose taxation strategy to maximize withholding tax according to self assessment system. The research use interpretive paradigm with literature method approach. The result of the research indicate that first, tax compliance in Indonesia is still low category so it need efforts to improve. Second, with withholding tax system will assurance due tax payment because tax taker is more discipline to cut tax for tax payer. Third, withholding tax system can control effectively and efficiently to minimize examination object not for personal tax payer but for work or income giver. Fourth, through the withholding tax system, tax payers would cut taxes when the conditions of high economic capacity. Fifth, several proposals to improve the maximization WHT include expanding the tax base and direct tax cuts were not final is still possible into the final tax in the scheme of withholding tax, giving rewards to a third party who is disciplined and obedient, open access to the Direktorat Jenderal Pajak (DJP) on the banks of the effectiveness of tax policy and make the Single Identification Number (SIN) to attract new taxpayers. This study contributes to the formulation of policies Direktorat Jenderal Pajak (DJP).

Download Full-text

You’ve Got Mail: A Randomized Field Experiment on Tax Evasion

Management Science ◽

10.1287/mnsc.2019.3390 ◽

2020 ◽

Vol 66 (7) ◽

pp. 2801-2819 ◽

Cited By ~ 5

Author(s):

Kristina M. Bott ◽

Alexander W. Cappelen ◽

Erik Ø. Sørensen ◽

Bertil Tungodden

Keyword(s):

Behavioral Economics ◽

Field Experiment ◽

Tax Evasion ◽

Detection Probability ◽

Large Scale ◽

Tax Compliance ◽

Extensive Margin ◽

Long Term Effects ◽

Randomized Field Experiment

We report from a large-scale randomized field experiment conducted on a unique sample of more than 15,000 taxpayers in Norway who were likely to have misreported their foreign income. By randomly manipulating a letter from the tax authorities, we cleanly identify that moral suasion and the perceived detection probability play a crucial role in shaping taxpayer behavior. The moral letter mainly works on the intensive margin, while the detection letter has a strong effect on the extensive margin. We further show that only the detection letter has long-term effects on tax compliance. This paper was accepted by Yan Chen, behavioral economics.

Download Full-text