Spillovers and Long-Run Effects of Messages on Tax Compliance: Experimental Evidence from Peru

Arbeitspapier

We carry out a randomized controlled trial to evaluate the effect of three different types of messages sent to taxpayers on their compliance with the rental income tax (direct effect) and the spillovers produced on payments related to the capital gains and the self-employment income taxes. One message highlights detection, another appeals to social norms, and the third type appeals to altruism. This is the first study to evaluate if these messages can produce spillovers across taxes and to perform a long-term follow-up. This is important to determine if the treatment increases tax revenues. We find that the message addressing detection produces a positive and permanent direct effect and a negative but transitory spillover on the other two taxes. Overall, it increases tax revenues by US$3.92 per dollar spent in the long run. The message appealing to social norms has no direct effect but produces a permanent negative spillover on the capital gains tax. Ignoring this spillover would have lead one to conclude that this message is innocuous when in fact produces a loss of US$ 5.20 per dollar spent in the long run. The message appealing to altruism produces a transitory negative effect and no spillovers, and has no effect on tax revenues in the long run.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 13974

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Illegal Behavior and the Enforcement of Law ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; Tax Evasion and Avoidance ; Public Goods
• Subject: social norms ; altruism ; tax evasion ; randomized controlled trial ; Latin America

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Castro, Juan Francisco ; Velásquez, Daniel ; Beltrán, Arlette ; Yamada, Gustavo
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/232726
• Last update: 10.03.2025, 11:44 AM CET