Abstract
The aim of this trial is to investigate the long-term compliance behaviour of small businesses in Indonesia. More specifically, the trial analyses the long-term compliance effects of three treatment letters, i.e., deterrence, literacy, and public goods provision letters. The target population consists of approximately 12,000 small businesses – those with annual turnover less than IDR4.8 billion from the period of 2017 to 2019. Three treatments will be tested: (1) deterrence letter, which highlights the submission deadline, administrative late-filing penalty IDR100,000, utilisation of computerised audit, the possibility of utilisation computerised audit and further enforcement actions towards non-compliers; (2) literacy letter, in which we simplify the letters, adopts less-formal style letter, emphasizes the simple guidance on how to pay and report taxes, and attaches the QR code to access official mobile apps and DGT webpage; (3) public goods provision letter, which highlights the taxpayer’s contribution for national budget, particularly for COVID-19 expenditure and future generation education. The treatments will be compared to a control group consisting of individuals who are received no letters. About 12,000 small businesses were randomly assigned to the four groups (about 3,000 individuals to each group).