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

This paper tests nudges delivered via WhatsApp to encourage timely annual tax returns among 24,887 individual non-employee taxpayers in six tax offices in Indonesia. We compared a standard email to three treatments delivered via a verified WhatsApp business account: (1) a standard message, (2) a deterrence message and (3) a reciprocity message. The pre-registered design permitted separating the effects of the mode of delivery (WhatsApp versus email) and behavioural messaging. Of the control group, 37.7% submitted their annual tax return on time. Based on WhatsApp status reports, we found 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 reciprocity message did not yield further improvement. Instead, we found that the deterrence message increased compliance by an additional 1.9 percentage points. Heterogeneity and sensitivity to deviations from the pre-registered design, including implementation, was investigated.