Incentives for tax compliance

The project studies whether incentives can be used to improve collection of value added taxes (VAT). VAT receipts are used as tickets in a lottery with monetary prizes. The idea is to motivate customers to ask for receipts and that this will lead to more receipts being issued. Increasing the issuance of VAT receipts will make more information about transactions available to the tax authority. This makes it easier for them to estimate and enforce taxes, and may therefore increase VAT revenues collected.

The policy question is whether positive incentives for customers in the form of a lottery can improve VAT revenue collection and affect business development.

We measure effects of the VAT receipt lottery on issuance of receipts, VAT revenues collected and business development using administrative and survey data.