Commitment to Pay Taxes: A Field Experiment on the Importance of Promise

Arbeitspapier

The ability of a tax authority to successfully collect taxes depends critically on both its relationship with the taxpayers and how strongly these taxpayers are committed to contributing to the common good. We present evidence on a new non-intrusive approach aimed at fostering the commitment to pay taxes. Using a between-subject design in a unique field setting, we experimentally test whether tax compliance can be increased by linking a voluntary promise of timely payment to a reward. We measure the change induced by an additional compliance promise through identifying the pure reward effect. We find that although previously compliant taxpayers are more likely to make a promise, the commitment to do so can improve payment behaviour. This effect, however, is strongly dependent on the type of reward to which the promise is linked. Compliance only increases when the reward is non-financial. No compliance effect is observed if cash is offered in return for promise fulfilment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6186

Classification and Topics

• Classification: Wirtschaft ; Tax Evasion and Avoidance ; Field Experiments ; Relation of Economics to Social Values
• Subject: tax compliance ; field experiment ; commitment ; promise ; supportive incentives ; psychological contract

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koessler, Ann-Kathrin ; Torgler, Benno ; Feld, Lars P. ; Frey, Bruno S.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/149273
• Last update: 10.03.2025, 11:44 AM CET