Research Insights: Can Salient Penalties and Enforcement on Tax Bills Increase Compliance Across Taxes?

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Nov 2021
An analytical model and a field experiment in Argentina proved that salient enforcement messages on one type of tax could increase compliance with another tax. Salient messages of penalties and enforcement for the property tax had positive spillover effects on declaration of the gross sales tax, with taxpayers in the treatment group increasing their reported tax by 2 percent. Taxpayers appear to assume that higher enforcement of one tax implies higher enforcement for others, thereby increasing their compliance across taxes.