Post on 25-Jan-2020
Ústav verejnej politikyFakulta sociálnych a ekonomických vied
Univerzita Komenského v Bratislave
How do tax reminders to debtors affect their will to pay? The field experiment – Prievidza, Slovakia
Matúš Sloboda & Patrik Pavlovský
A CONTEXT
Behavioural public policy which cares about its citizens
Potential areas:- Tax compliance- Safety- Bureaucracy- Public spaces- Education- Waste separation
CIVITA CENTER
TARGET / Explore / Solution / Testing /Scaling
Insufficient tax revenue
additional taxcomplianceenforcement generates only 60% compliance
POLICY CHALLENGE
PD: 74% (+15%)SVK: 71% (IFP, 2018)
BEHAVIOR
TARGET / Explore / Solution / Testing /Scaling
Increase the voluntary tax compliance after the deadline
THE GOAL
TARGET / Explore / Solution / Testing /Scaling
2016 residents of Prievidza, who did not pay the debt on the local taxes by the 31.12.2018
SAMPLE▫ 1102 males / 914 females▫ Age:
� MEDIAN: 44 years� MEAN: 45 years
▫ 1285 debtors are second or moretimes debtors▫ Total debt 292 500 eur▫ Median debt 82 eur
1/2019TAX NOTICE (May)
Target/ EXPLORE/ Solution / Testing /Scaling
CITIZEN JOURNEY
STANDARD DEBT NOTICE
(Oct)
PRE-DISTRAINT NOTICE
(March 2020)
TAX COMPLIANCE DEADLINE (Aug)
FINANCIAL AUDIT (Jan)
Web-page / Call centre
Target/ EXPLORE/ Solution / Testing /Scaling
Only 1-time notification
Opacity of the information provided
Insignificant ´call-to-action´elements
THE BARIERS
REMINDER MORAL SUASION
frame
Social norms + moral suasion
QR that loads the payment data common for all debtors
CTA
REMINDER1/2019
NEW CITIZEN JOURNEY
NEW DEBT NOTICE (Oct)
PRE-DISTRAINT NOTICE (March 2020)
Web-page / Call centre
FINANCIAL AUDIT (Jan)
Target/ Explore / SOLUTION / Testing /Scaling
MORAL SUASION:„9 out of 10 inhabitant of Prievidza believes that paying taxes and in this way support the functioning of the city is the right thing.”
PUBLIC GOOD - FRAME:„Prievidza is prospering thanks to you. In last year, we managed to: ..... Help again this year. By paying your tax on communal waste right now according to the instructions, you cultivate your environments immediately.“
Sorting by street (statistically adjusted -each group sa similar distribution of debtors, noteorious debtors exluded), than ascribing 1/3 to control group and rest to the treatment groups – two framings
CONTROL (no reminder)
TREATMENT 1 (reminder)
Target/ Explore/ Solution / TESTING /Scaling
RANDOMIZATION
TREATMENT 2
RQ: How does the reminders affect debtors´ tax compliance?
• Independent variable:▫ Reminder received (yes/no) and which frame
• Dependent variables:▫ Compliance 1 (Did the debtor pay the debt?)▫ Compliance 2 (How fast did the debtor pay?)
• Control variables:▫ Basic demographics (sex, age group)▫ Fidelity (first time debtor? Yes/No)▫ Debt´s amount (continuous)
Target/ Explore/ Solution / TESTING /Scaling
PITFALLS – COLLECTION AND PROCESING OF DATA
The privacy and security of personal data about individuals within the EU (GDPR)
• Time• Distress• Reluctance• Misunderstanding
PITFALLS: COLLECTION AND PROCESING OF DATA
LESSONS LEARNED
• The realization of your field experiment will take quite some time▫ 70 % of your effort is preparation
• The executives have different approach than clerks
• Its not that unlikely you will have to measure adequate baseline data by yourself
Ústav verejnej politikyFakulta sociálnych a ekonomických vied
Univerzita Komenského v Bratislave
THANK YOU
patrik.pavlovsky@fses.uniba.sk matus.sloboda@fses.uniba.sk
CIVITA CENTER