Nudging Taxpayers via Instant Messaging to Submit Their Annual Tax Return: Evidence from a Field Experiment in Indonesia

Rio Widianto*, Matthias Rieger, Vid Adrison, Mansoob Murshed

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

This paper tests nudges delivered via WhatsApp to encourage timely annual tax returns among 24,887 individual non-employee taxpayers in six tax offices. We compared a standard email to three treatments delivered via a verified WhatsApp business account: (i) a standard message, (ii) a deterrence message, and (iii) a reciprocity message. The pre-registered design permits separating the effects of the mode of delivery (WhatsApp vs. email) and behavioral messaging. 37.7% of the control group submit their annual tax return on time. Based on WhatsApp status reports, we find that 44.2% of treated taxpayers received and read the messages. The standard reminder via WhatsApp increased tax return rates by 3.3 percentage points. The addition of the reciprocity message did not yield further improvement. Instead, we find that the deterrence message increased compliance by an additional 1.9 percentage points. We investigate heterogeneity and sensitivity to deviations from the pre-registered design including implementation.
Original languageEnglish
Pages (from-to)1-28
Number of pages28
JournalBulletin of Indonesian Economic Studies
DOIs
Publication statusPublished - 18 Dec 2024

Bibliographical note

JEL: C93 D91 H20 H31

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