Tax enforcement under limited state capacity: using third-party data from buyer-seller relationships

Last registered on March 05, 2024


Trial Information

General Information

Tax enforcement under limited state capacity: using third-party data from buyer-seller relationships
Initial registration date
November 06, 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
November 15, 2023, 3:54 PM EST

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

Last updated
March 05, 2024, 11:31 AM EST

Last updated is the most recent time when changes to the trial's registration were published.


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Primary Investigator

University of Naples Federico II and CSEF

Other Primary Investigator(s)

PI Affiliation
World Bank
PI Affiliation
Louvain Institute of Data Analysis and Modeling in Economics and Statistics (LIDAM)
PI Affiliation
Ministere des Finances et du Budget, République du Sénégal

Additional Trial Information

On going
Start date
End date
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Most economic actors -- incorporated firms, self-employed and employees -- in low-income countries are not tax registered and among those registered, non-compliance (under-reporting and failure to declare) is common. Obtaining reliable information on the existence and scope of their economic activities poses complex challenges to tax administrations operating with very limited resources. As a consequence, many administrations have chosen to concentrate enforcement efforts to a small number of larger firms regrouped in Large Taxpayers and Medium-sized Taxpayers units. We hypothesize that due to their centrality in a country's production network, these taxpayers can be a valuable entry point for the administration to obtain information about the economic activities of less compliant and harder to reach actors. In this RCT, we work with the Senegalese tax administration to test whether information provided by large and medium-sized taxpayers on their buyer-seller relationships with other economic actors can be leveraged to expand enforcement among the latter.
External Link(s)

Registration Citation

Czajka, Leo et al. 2024. "Tax enforcement under limited state capacity: using third-party data from buyer-seller relationships." AEA RCT Registry. March 05.
Experimental Details


We use information provided by large and medium-sized firms in Senegal on their buyer-seller relationships to detect seller non-compliance (under-declaration and failure to declare) for fiscal years 2019-2021. This information is used by the tax administration (specifically its 11 tax centers that serve the capital region) to initiate tax enforcement procedures, starting with an official letter requesting information and clarifications. All treatment group taxpayers receive this initial letter after which the tax centers continue standard procedures according to the taxpayer's case (under-declaration or failure to declare), response to the initial letter, and total under-declaration amount in question.
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
1. Rectifications of 2019-2021 fiscal year revenue declarations (rectification(s) submitted, rectification(s) complete (amount declared larger or equal total payment amount received), tax base declared, amount of additional tax due declared, amount of additional tax due collected by the tax administration, fine amount collected by the tax administration).
2. Next regular tax declarations (monthly, yearly for 2023-24 fiscal years) (declaration submitted, whether non-compliance is detected, tax base declared, amount of tax due declared, amount of tax due collected by the tax administration, number of employees declared, declaration of cessation of activities).
3. Following buyer-seller relation declaration(s) by buyer (throughout 2024 and early 2025 for 2024) (continued existence of relationship(s), new relationship(s), any relationships, total amount per relationship, total amount).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Network effects 1: Effects on the buyer-seller network.
Network effects 2: Spill-over effects through tax preparers.
Heterogeneity: By tax center, by non-compliance type, by total underdeclaration amount, by firm size, by tax year (for which under-reporting has been detected, 2019-21), by buyer treatment status of previous RCT.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We use within-stratum quadruplet-wise randomization to assign taxpayers to treatment and control group. The strata are defined by tax center (the 11 tax centers that implement the intervention for the taxpayers assigned to them) and non-compliance type (5 types based on non- and under-declaration behavior and registration status). Two tax centers have fewer than 5 strata as they do not have all non-compliance types. Within these strata, we form quadruplets by total under-declared amount. Half of each quadruplet are assigned to treatment and half to control.
Experimental Design Details
Not available
Randomization Method
Randomization code programmed in Stata
Randomization Unit
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
2,970 taxpayers
Sample size: planned number of observations
2,970 taxpayers
Sample size (or number of clusters) by treatment arms
1,486 tax payers in treatment group, 1,484 tax payers in control group
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number