Repeated Interventions for Long-Term Tax Compliance: Evidence from A Natural Field Experiment in Indonesia

Last registered on June 06, 2023

Pre-Trial

Trial Information

General Information

Title
Repeated Interventions for Long-Term Tax Compliance: Evidence from A Natural Field Experiment in Indonesia
RCT ID
AEARCTR-0011485
Initial registration date
May 26, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
June 06, 2023, 9:20 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Region

Primary Investigator

Affiliation
ANU

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2023-06-05
End date
2023-06-24
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
The objective of this trial is to investigate the endurance effect of interventions on small businesses' tax compliance in Indonesia. Specifically, this study attempts to address whether there are sustainable effects rather than immediate effects following an intervention. We explore whether taxpayers will learn from previous treatments, or if regular communication is necessary to maintain long-term effects and sustainability. In doing so, we replicate and resend the identical treatment letters (i.e., deterrence, literacy, and public goods provision letters) one year after our initial interventions. The target group for this study comprises around 5,600 small taxpayers. The treatment groups will be contrasted with a control group comprising individuals who did not receive any letters. The target populations were randomly divided into four equal groups, with each group consisting of around 1,400 observations.
External Link(s)

Registration Citation

Citation
Satyadini, Agung. 2023. "Repeated Interventions for Long-Term Tax Compliance: Evidence from A Natural Field Experiment in Indonesia." AEA RCT Registry. June 06. https://doi.org/10.1257/rct.11485-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
The experimental design is a replication of the previous interventions that were concluded in December 2021. The design is focused on improving small businesses' tax compliance, particularly related to their tax monthly payment and tax return submission. Three treatments will be tested: (1) Treatment 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) Treatment 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) Treatment 3: "public goods provision letter", which highlights the taxpayer’s contribution for national budget, particularly for COVID-19 expenditure and future generation education. The control group consists of individuals who are not received letters from the DGT. Copies of sample letters and emails are attached in "Docs & Materials" of this registration.
Intervention Start Date
2023-06-05
Intervention End Date
2023-06-24

Primary Outcomes

Primary Outcomes (end points)
The outcome measures consist of (1) a dummy indicating tax returns filing, (2) a dummy indicating non-zero payment, (3) a dummy indicating timely filing, (4) a dummy indi- cating both non-zero payment and timely filing, (5) a dummy indicating improvement in tax filing, which derived from the indicator of Compliance Risk Management (CRM) dashboard – a combination assessment score between taxpayer’s fiscal importance and risks 10, (6) a dummy indicating electronic payment, whether taxpayers utilised e-billing; (7) number of inbound communications to tax office, a log contact from taxpayer in the following month; and (8) amount of tax payment.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
To accomplish a plausible stratified randomisation, taxpayers with comparable baseline characteristics were grouped into strata. Each case was randomly assigned to one of the treatment groups or the control group within each stratum. This technique provided an even distribution of taxpayers across groups based on their baseline characteristics. The random assignment resulted in the following allocation of taxpayers: (1) Treatment Group 1 (deterrence letters): 1,424 observations; (2) Treatment Group 2 (literacy letters): 1,379 observations; (3) Treatment Group 3 (public goods provision letters): 1,417 observations; and (4) Control Group: 1,379 observations.
Experimental Design Details
Randomization Method
The full de-identified population was provided by the DGT. Each case was randomly assigned to one of the treatment groups or the control group within each stratum. This technique provided an even distribution of taxpayers across groups based on their baseline characteristics. Randomization was performed using a random variable generator in STATA and a random selection of the seed. For stratified randomisation, the user-written command ’randtreat’ version 1.4 was utilised.
Randomization Unit
individual taxpayers
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
5600 taxpayers
Sample size: planned number of observations
5600 taxpayers
Sample size (or number of clusters) by treatment arms
5600 taxpayers
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Australian National University Human Ethics Committee
IRB Approval Date
2021-09-06
IRB Approval Number
2021/508
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials