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Insensitive to nudging in tax benefits? The case of Colombia

Author

Listed:
  • Luis Fernando Gamboa Niño

    (Pontificia Universidad Javeriana)

  • Luis Carlos Reyes

    (Pontificia Universidad Javeriana)

  • Alejandro Montoya Castaño

    (Pontificia Universidad Javeriana)

Abstract

Tax compliance is one of the main challenges in countries such as Colombia, which is characterized by high informality levels given that tax revenue is the fuel of several dimensions of economic activity. We conducted a Randomized Control Trial (RCT) to assess how sensitive consumers are to some of the benefits (personal or social) for requesting electronic invoices in the objective to reduce the informality in economic transactions in Colombia. We sent approximately 60,000 emails to five treatment groups and a control group. The treatments focused on tax discounts, participation in fiscal lotteries and three alternative uses of public spending. Our results indicate that tax filers are highly insensitive to the existence of individual economic benefits and social allocations of public spending. We discuss potential explanations for these findings and offer policy recommendations.

Suggested Citation

  • Luis Fernando Gamboa Niño & Luis Carlos Reyes & Alejandro Montoya Castaño, 2024. "Insensitive to nudging in tax benefits? The case of Colombia," Revista Outlier, Universidad Javeriana - Bogotá, vol. 24(5), pages 1-18.
    • Handle: RePEc:col:000440:021409
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    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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