Working Paper: NBER ID: w25623
Authors: Joel Slemrod; Obeid Ur Rehman; Mazhar Waseem
Abstract: We examine two Pakistani programs to explore the role of deterrence as well as social and psychological factors in the tax compliance behavior of agents. In the first of these programs, the government began revealing income tax paid by every taxpayer in the country. The second program publicly recognizes and rewards the top 100 tax paying corporations, partnerships, self-employed individuals, and wage-earners. We find that both public disclosure and social recognition of top taxpayers caused a substantial increase in tax payments. We explore the drivers of this behavior, including the shift of social norms toward compliance.
Keywords: Tax Compliance; Public Disclosure; Social Recognition; Deterrence; Pakistan
JEL Codes: H2; H24; H26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Public Disclosure Program (G28) | Tax Payments (H29) |
| Public Disclosure Program (unique names) (Y40) | Tax Payments (H29) |
| Public Disclosure Program (common names) (G18) | Tax Payments (H29) |
| Public Disclosure Program (G28) | MPs Tax Payments (H29) |
| TPHC Program (I19) | Tax Payments (H29) |
| Public Disclosure Program (G28) | Social Norms (Z13) |
| TPHC Program (I19) | Social Norms (Z13) |