Tax Compliance and Information Provision – A Field Experiment with Small Firms
23 Pages Posted: 20 May 2015
Date Written: April 22, 2015
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: Suggested Citation