Tax Compliance and Information Provision – A Field Experiment with Small Firms

23 Pages Posted: 20 May 2015

See all articles by Philipp Dörrenberg

Philipp Dörrenberg

University of Mannheim; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); ZEW – Leibniz Centre for European Economic Research

Jan Schmitz

Radboud University Nijmegen - Department of Economics

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Date Written: April 22, 2015

Abstract

We study tax compliance in Slovenia using data generated in a field experiment. Small accounting companies were randomly assigned to an untreated control group and two treatment groups. Companies in the first treatment group received a letter that highlighted the importance of paying taxes and informed about the likelihood of becoming subject to an audit. In the second treatment group, tax officers from the tax authorities handed out in person the same letter that companies in the first treatment group received by post. The results indicate that such letters can increase compliance, and trigger even more compliance if handed over in person. These findings are in line with the theoretical predictions that we derive to rationalize the experiment.

Keywords: Tax Compliance, Audits, Randomized Field Experiment, Tax authority, Information provision

JEL Classification: H20, H32, H50, C93

Suggested Citation

Dörrenberg, Philipp and Schmitz, Jan, Tax Compliance and Information Provision – A Field Experiment with Small Firms (April 22, 2015). ZEW - Centre for European Economic Research Discussion Paper No. 15-028, Available at SSRN: https://ssrn.com/abstract=2608118 or http://dx.doi.org/10.2139/ssrn.2608118

Philipp Dörrenberg (Contact Author)

University of Mannheim ( email )

L 7, 3-5
Mannheim, 68161
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Munich
Germany

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Jan Schmitz

Radboud University Nijmegen - Department of Economics ( email )

Nijmegen, 6500 HK
Netherlands

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