Pecuniary and Non-Pecuniary Motivations for Tax Compliance: Evidence from Pakistan

75 Pages Posted: 25 Jul 2019

See all articles by Joel B. Slemrod

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Obeid Ur Rehman

University of Michigan at Ann Arbor - Department of Economics

Mazhar Waseem

University of Manchester

Multiple version iconThere are 3 versions of this paper

Date Written: 2019

Abstract

We examine two Pakistani programs to explore the role of deterrence as well as social and psychological factors in the tax compliance behavior of agents. In the first of these programs, the government began revealing income tax paid by every taxpayer in the country. The second program publicly recognizes and rewards the top 100 tax paying corporations, partnerships, self-employed individuals, and wage-earners. We find that both public disclosure and social recognition of top taxpayers caused a substantial increase in tax payments. We explore the drivers of this behavior, including the shift of social norms toward compliance.

Keywords: tax evasion, income tax, social norms

JEL Classification: H240, H250, H260

Suggested Citation

Slemrod, Joel B. and Ur Rehman, Obeid and Waseem, Mazhar, Pecuniary and Non-Pecuniary Motivations for Tax Compliance: Evidence from Pakistan (2019). CESifo Working Paper No. 7731. Available at SSRN: https://ssrn.com/abstract=3422626

Joel B. Slemrod (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Obeid Ur Rehman

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Mazhar Waseem

University of Manchester ( email )

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Oxford Road
Manchester, M13 9PL
United Kingdom

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