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  • Report
  • 5th Jun 2020

Evaluating the Impact of a Small Taxpayer Guide on Tax Compliance

In our third trial with Superintendencia de Administración Tributaria (SAT), we evaluated the impact of SAT’s ‘Small Taxpayer Guide’ on Small Taxpayer’s declarations over the six months after they registered with the tax authority. By providing taxpayers with the guide when they are registering with SAT, we hoped to leverage a moment of transition to encourage good tax formation. In addition, the guide contained clear, simple guidelines about how Small Taxpayers should comply with their obligations and contained a checklist for monthly declarations.

The guide was rolled out across all 32 of SAT’s tax offices at two-month intervals for an eight-month period between May and December 2018, allowing evaluation through a stepped-wedge randomised controlled trial. This provided a sample of 54,096 newly-registered Small Taxpayers.

We found that the Small Taxpayer Guide had no effect on average declaration rates in the first six months after registration. However, there was a positive impact on the average monthly payment – average payment among taxpayers in the Treatment group was 12% higher (equivalent to $2.34 per person per month) compared to the Control group. Factoring in the cost of producing the guides, this would amount to an additional $100,000 per month if the guide had been given to the full sample.

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Authors

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Salvador López García

Superintendencia de Administración Tributaria

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Madeleine Meza Linares

Superintendencia de Administración Tributaria

Monica Wills Silva

Principal Advisor - International Programmes

Dr Stewart Kettle

Principal Advisor - International Development

David Nolan

Research Advisor

Chloe Bustin

Senior Advisor

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Daniela Mendez

BIT

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Joseph Cole

BIT