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Who’s calling? The effect of phone calls and personal interaction on tax compliance
- Source :
- International Tax and Public Finance. 28:1302-1328
- Publication Year :
- 2021
- Publisher :
- Springer Science and Business Media LLC, 2021.
-
Abstract
- Most tax agencies use letters as the method of communicating with taxpayers. Still, other technologies exist that could be more effective. This paper reports the results of a field experiment conducted by the National Tax Agency of Colombia (DIAN), using phone calls to reduce tax delinquencies. DIAN randomly assigned 34,000 tax debtors to a phone call operation using a fixed script to communicate existing debts and invite taxpayers to a meeting at the local tax agency office. Phone calls were very effective to increase collection of unpaid taxes. Conditional on the phone call being made, the effect on the treatment is about 25 percentage points higher than the control group (about a fivefold increase). We also find suggestive evidence that the personal interaction seems to be an important channel for explaining taxpayers’ behavior. Faced with a tax agent, taxpayers tend to commit to attending the meeting and paying the tax owed. However, many taxpayers who commit do not make payment effective. The findings complement a nascent literature that shows that there are plenty of gains from innovating in the communication strategy. They also indicate that personal interactions are important, but they have to be paired with easy-to-follow and immediate actions. Paying taxes is easier said than done.
- Subjects :
- Economics and Econometrics
media_common.quotation_subject
05 social sciences
Control (management)
Advertising
Commit
Payment
0506 political science
Phone
Accounting
Debt
0502 economics and business
Agency (sociology)
050602 political science & public administration
Economics
050207 economics
Enforcement
Finance
media_common
Public finance
Subjects
Details
- ISSN :
- 15736970 and 09275940
- Volume :
- 28
- Database :
- OpenAIRE
- Journal :
- International Tax and Public Finance
- Accession number :
- edsair.doi...........2afab55f30b56a3a41fb1d2a709be43c