Nudging Taxpayers Via WhatsApp to Submit Their Annual Tax Return: Evidence From a Field Experiment in Indonesia

There are four experimental conditions: (1) Control - Standard Message (2) WhatsApp - Standard Message (3) Deterrence-WhatsApp Message (4) Reciprocity-WhatsApp Message

Condition (1) receives the standard email. Condition (2) gets the same standard email but an additional standard message by WhatsApp. Condition (3) receives the standard email and a deterrence WhatsApp message. Condition (4) receives the standard email and a reciprocity WhatsApp message.

The text messages in the four groups will be as follows (translated to English):

(1) Control Message (email)

Dear Mr X

Give your support to Indonesia by not delaying the obligation to pay taxes and submit the Annual Income Tax Return for the 2022 Fiscal Year.

The taxes you pay contribute as one of the main sources of government funds to encourage economic recovery, improve the quality of public services, and support the strengthening of the national economy in 2023.

For the convenience, validate your NIK-NPWP and submit your Annual Income Tax Return via e-Filing, please click https://djponline.pajak.go.id/account/login.

You can independently fill out your Tax Return with the guidelines on the page www.pajak.go.id/lapor-tahunan or social media @DitjenPajakRI.

If you need consultation, you can contact our officers via:
• Live chat on the website www.pajak.go.id;
• Twitter account @kring_pajak;
• Email [email protected];
• Official electronic mail (email) for vertical work units (list can be seen at www.pajak.go.id/unit-work)

Today, many Indonesian are obedient in submitting tax return online.

Avoid various problems that might occur if you submit your tax return at the end of March 2023, such as delays in website pages for e-Filing submission which will result in the imposition of fines if the SPT is submitted past the March 31, 2023 deadline.

Greetings,


Director General of Taxes

If you have submitted the 2022 Annual Income Tax Return, we would like to thank you and this message can be ignored

Note: Please always check the official phone number of the tax office at https://pajak.go.id/daftar-unit-kerja


(2) Standard-WhatsApp Message

Dear Mr X

Give your support to Indonesia by not delaying the obligation to pay taxes and submit the Annual Income Tax Return for the 2022 Fiscal Year.

The taxes you pay contribute as one of the main sources of government funds to encourage economic recovery, improve the quality of public services, and support the strengthening of the national economy in 2023.

For the convenience, validate your NIK-NPWP and submit your Annual Income Tax Return via e-Filing, please click https://djponline.pajak.go.id/account/login

You can independently fill out your Tax Return with the guidelines on the page www.pajak.go.id/lapor-tahunan or social media @DitjenPajakRI.

If you need consultation, you can contact our officers via:
• Live chat on the website www.pajak.go.id;
• Twitter account @kring_pajak;
• Email [email protected];
• Official electronic mail (email) for vertical work units (list can be seen at https://pajak.go.id/daftar-unit-kerja)

Today, many Indonesian are obedient in submitting tax return online (online).

Avoid various problems that might occur if you submit your tax return at the end of March 2023, such as delays in website pages for e-Filing submission which will result in the imposition of fines if the SPT is submitted past the March 31, 2023 deadline.

Greetings,


Director General of Taxes

If you have submitted the 2022 Annual Income Tax Return, we would like to thank you and this message can be ignored

Note: Please always check the official phone number of the tax office at https://pajak.go.id/daftar-unit-kerja

(3) Deterrence-WhatsApp Message (Text and Picture Messages)
PICTURE MESSAGE: Upload in Supporting Document
TEXT MESSAGE:

Dear Mr X

‼️Submit Your Annual Tax Return Now‼️

⚠️WARNING⚠️
💸 Avoid a fine for late and no submission
🏛️ You may face imprisonment and/or a maximum fine equal to 4 (four) times the amount of unpaid tax if you do not declare your actual income

For the convenience, validate your NIK-NPWP and submit your Annual Income Tax Return via https://djponline.pajak.go.id/account/login

TUTORIALS:
Filing The Annual Tax Return: https://linktr.ee/spt518
Validating NIK-NPWP: https://bit.ly/validasiNIK

MORE INFORMATION:
📍https://bit.ly/location027 (at 08.00-16.00 WIB)
☎️ 021-6541870/6541872
💬 Live chat on www.pajak.go.id
📩 [email protected]


Greetings,

Jakarta Kemayoran Tax Office

If you have submitted the 2022 Annual Income Tax Return, we would like to thank you and this message can be ignored

Note: Please always check the official phone number of the tax office at https://pajak.go.id/daftar-unit-kerja

(4) Reciprocity-WhatsApp Message
PICTURE MESSAGE: Upload in Supporting Document
TEXT MESSAGE:

Dear Mr X

‼️Submit Your Annual Tax Return Now‼️

Do you know that one million Rupiah of your tax payment contributes to eleven public sectors?

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DON’T WORRY!
The Ministry of Finance and Directorate General of Tax has been Rewarded by the Corruption Eradication Commission as The Second-Best Institution in Control Gratification in 2020 🏆

Still worried??🤔
If you see any indication of fraud, report it to DGT - Whistleblowing System on:
🌏 www.wise.kemenkeu.go.id
☎️ 021-1500200

For the convenience, validate your NIK-NPWP and submit your Annual Income Tax Return via https://djponline.pajak.go.id/account/login

TUTORIALS:
Filing The Annual Tax Return: https://linktr.ee/spt518
Validating NIK-NPWP: https://bit.ly/validasiNIK

MORE INFORMATION:
📍https://bit.ly/location027 (at 08.00-16.00 WIB)
☎️ 021-6541870/6541872
💬 Live chat on www.pajak.go.id
📩 [email protected]


Greetings,

Jakarta Kemayoran Tax Office


If you have submitted the 2022 Annual Income Tax Return, we would like to thank you and this message can be ignored

Note: Please always check the official phone number of the tax office at https://pajak.go.id/daftar-unit-kerja

2023-03-20

2023-03-31

Tax return submitted

Tax return equals 1 if reported on time and zero otherwise (unsubmitted or submitted too late). We expect tax return rates to be higher in the treated groups (conditions 2,3,4) compared to the control/standard message (condition 1). We do not have a hypothesis which of the treated groups (conditions 2,3,4) has the largest impact.

Amount of tax payment

The variable is in rupiahs and available if the taxpayer submitted a tax return. We expect the tax amounts reported to be higher in conditions 3 and 4 (compared to conditions 1 and 2) due to the reciprocity and threat content of the nudges.

The treatment effects will be estimated based in an intention-to-treat (ITT) model with and without covariates. Both linear probability models and probit models will be presented.

Baseline covariates include taxpayers' characteristics (age, gender, and timely tax return status in the previous year). We will also show results with tax office dummies included.
We will present a heterogeneity analysis based on our baseline model without controls via sample splits by gender and at the sample median age.
We also intend to explore potential mechanisms relating to taxpayer decisions. A post-experimental interview will be used to collect information on taxpayers' expectations. The interview aims to answer whether the treatment mechanism works and how taxpayers respond to the treatments and delivery methods used by reporting their 2022 Annual Income Tax Return on time.

Randomization is carried out in the pre-experimental stage (before sending the message). We randomly assign (intent-to-treat) the cleansed data of the individual self-employed taxpayers to four experimental conditions. We do so, balancing on age, gender, and annual tax return reporting on-time for the 2021 fiscal year. We use the randomize command in STATA. We block randomization within tax office.

individual self-employed taxpayers

No

Six tax offices in five cities (one in Ciamis, Cilacap, Jayapura, Merauke, and two in Jakarta) in four Provinces in Indonesia are included in the experiment. However, the randomization is done at the individual level. Randomization is done via blocking by tax office to ensure balanced group sizes per office (block randomization).

The potential sample size is 24,887 individual self-employed taxpayers based on historical administrative records with phone number available.

The total of 24,887 taxpayers is divided into four groups.

The potential study population covers 24,887 individual tax payers with a contact phone number drawn from administrative data in 6 tax offices across four provinces. With four groups, power of 80%, alpha of 5%, and a control proportion of 0.4035842, we are powered for a MDE of 0.0245 on the primary outcome. [power twoproportions 0.4035842. alpha (0.05) n1(6221) n2 (6221) power (0.8)].