ICTD Working Paper 58

Although field experiments in tax compliance represent a growing area of research, the literature has so far focussed exclusively on high and middle-income countries. This paper starts to fill this gap by reporting the results of a tax field experiment in Rwanda, while also highlighting some characteristics that may be common to other low-income countries. We evaluate an intervention carried out by the Rwanda Revenue Authority (RRA), which involved sending messages to taxpayers to nudge their declaration behaviour during the filing period of January-March 2016. Focussing particularly on business profits tax, our study is designed to address two interrelated questions. First, what are the key drivers of compliance in Rwanda? Second, what is the best delivery method to reach taxpayers with messages designed to improve compliance? Although other studies have explored delivery methods in the context of taxpayer communication, our study is the first one to interact these methods with different message contents. As a result, we evaluate a set of nine treatments that combine three message contents (deterrence, fiscal exchange, reminders) and three delivery methods (letters, SMS, emails) – as compared to a control group that received no message. We find that friendly approaches to taxpayers are generally more effective than deterrence. However, small taxpayers are still quite responsive to the possibility of being fined and prosecuted (deterrence). We also show that low-cost delivery methods like SMS and emails can be highly effective as compared to letters.


Giulia Mascagni

Giulia Mascagni is a Research Fellow at the Institute of Development Studies and Executive Director of the ICTD. Her main area of work is taxation, but she also has research interest in public finance, evaluation of public policy, and aid effectiveness. She is an economist by training, holding a PhD in Economics from the University of Sussex. Her main geographical interest lies in African countries, with a particular focus on Ethiopia and Rwanda.

Christopher Nell

Nara Monkam

Nara is the Director of Research at the African Tax Administration Forum (ATAF) since February 1, 2014. She is also a member of the Davis Tax Committee, appointed in July 2013 by the Minister of Finance to reassess the South African tax system. Prior to joining the ATAF, she was the Deputy Director of the African Tax Institute (ATI) and a Senior Lecturer (2009-2014) in the Department of Economics at the University of Pretoria.
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