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Targeting in Tax Compliance Interventions : Experimental Evidence from Honduras

Author

Listed:
  • Del Carmen,Giselle
  • Espinal Hernandez,Edgardo Enrique
  • De Gouvea Scot De Arruda,Thiago

Abstract

Tax authorities often use low-cost communication with taxpayers to encourage voluntarycompliance and avoid other costly interventions. This paper reports findings from an experiment with more than 30,000taxpayers in Honduras, designed to assess how taxpayers with different risk scores respond to a communicationintervention. Across several outcomes, the average effect of the intervention on compliance was 0. Contrary to theexpectation of experts surveyed, only taxpayers considered to be at low risk of noncompliance increase their filing andreported income. Using rich administrative data and a causal forest algorithm, the paper finds that ex-ante predictedrisk and responsiveness to the intervention are negatively correlated. These findings can inform the design of targetedinterventions by tax authorities.

Suggested Citation

  • Del Carmen,Giselle & Espinal Hernandez,Edgardo Enrique & De Gouvea Scot De Arruda,Thiago, 2022. "Targeting in Tax Compliance Interventions : Experimental Evidence from Honduras," Policy Research Working Paper Series 9967, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9967
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    References listed on IDEAS

    as
    1. Stefano DellaVigna & Nicholas Otis & Eva Vivalt, 2020. "Forecasting the Results of Experiments: Piloting an Elicitation Strategy," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 75-79, May.
    2. Okunogbe,Oyebola Motunrayo & Santoro,Fabrizio, 2021. "The Promise and Limitations of Information Technology for Tax Mobilization," Policy Research Working Paper Series 9848, The World Bank.
    3. Vivi Alatas & Abhijit Banerjee & Rema Hanna & Benjamin A. Olken & Julia Tobias, 2012. "Targeting the Poor: Evidence from a Field Experiment in Indonesia," American Economic Review, American Economic Association, vol. 102(4), pages 1206-1240, June.
    4. Kettle,Stewart & Hernandez,Marco & Ruda,Simon & Sanders,Michael, 2016. "Behavioral interventions in tax compliance : evidence from Guatemala," Policy Research Working Paper Series 7690, The World Bank.
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