Effectiveness of Repeated Implementation Intention-Interventions on Organizations’ Likelihood to File Their Overdue Taxes

Abstract

This paper investigates the effect of facilitating implementation intentions on organizations’ tax compliance behavior. We conducted a large-scale, multi-wave field experiment involving the tax-paying behavior of all organizations that failed to file timely annual returns for a payroll tax in the province of Ontario. Organizations were randomly assigned to receive one of two letters: Ontario’s standard late notice (control) and a revised experimental late notice, which included step-by-step instructions of when, where and how to file a return. Our data indicate that instilling implementation intentions is effective at increasing organizations’ timely tax payment. In addition to replicating these findings across two waves, we find no evidence of habituation to our intervention over time. Our results provide evidence that procrastination may be a substantial but solvable barrier to improving organizational tax compliance. Moreover, we demonstrate the effectiveness of an intervention that typically targets individual’s behavior in the realm of organizational behavior.

Keywords: Government Tax Policy, Organizational Studies Behavior, Economics Behavior and Behavioral Decision Making, Multi-wave field experiment

JEL Classification: M