Benefits of Taxation as Incentives for Informal Sector Transformation: Evidence from Zambia

Last registered on July 06, 2026
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Pre-Trial

Trial Information

General Information

Title
Benefits of Taxation as Incentives for Informal Sector Transformation: Evidence from Zambia
RCT ID
AEARCTR-0018789
Initial registration date
June 30, 2026

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
July 06, 2026, 7:34 AM EDT

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

Locations

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Primary Investigator

Name
ALBERT CHANDA Kasoma
Affiliation
Friedrich Schiller University Jena
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Other Primary Investigator(s)

PI Name
Silke Uebelmesser
PI Affiliation
Friedrich-Schiller-Universität Jena
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Additional Trial Information

Status
In development
Start date
2026-07-03
End date
2027-07-31
Keywords
Behavior, Other
Additional Keywords
Tax compliance, informal sector, business formalization, information provision, fiscal reciprocity, public goods
JEL code(s)
O17, H26, H30, D72, D83
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study evaluates whether information treatments can affect tax compliance intentions among informal sector business owners and operators in Zambia. The informal sector represents a critical but largely untapped source of tax revenue, and many informal businesses remain outside formal systems even when the direct financial costs of compliance are relatively low. This suggests that non-financial barriers, including limited information, weak trust, and low perceived reciprocity between taxation and public services, may shape formalization and tax compliance decisions.
The experiment is implemented among informal sector operators drawn from an informal business sampling frame. Respondents are individually randomised into one of four arms: a placebo control group, a simplified registration information treatment, a localized public benefits of taxation treatment, and a general public benefits of taxation treatment.
The primary outcome is respondents’ stated willingness to pay taxes, measured first after the feedback stage, following respondents’ own prior belief estimates on registration time and expenditure shares, and second after related policy statements. Secondary outcomes include willingness to register, stated tax amount, posterior beliefs, and mechanism measures such as trust, reciprocity, fairness, and perceived cost or burden.
The study is expected to generate evidence on whether information interventions can shift intentions toward tax compliance and business formalisation. By comparing information on simplified procedures with information on localised and general public benefits, the study can inform communication strategies related to tax administration, business registration reforms, local public finance, and domestic revenue mobilisation.
External Link(s)

Registration Citation

Citation
Kasoma, ALBERT CHANDA and Silke Uebelmesser. 2026. "Benefits of Taxation as Incentives for Informal Sector Transformation: Evidence from Zambia." AEA RCT Registry. July 06. https://doi.org/10.1257/rct.18789-1.0
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Experimental Details

Interventions

Intervention(s)
This study implements an information provision experiment among informal sector business owners in Zambia. Respondents are randomly assigned to one of four arms: a placebo control group, a simplified registration information treatment, a localized public benefits of taxation treatment, and a general public benefits of taxation treatment.
The treatments provide information on business registration time, the share of public resources allocated to local government services, and the share of public resources allocated to education and healthcare. The aim is to assess whether these different types of information affect tax compliance preferences, including willingness to register a business and willingness to pay taxes.
Intervention Start Date
2026-07-03
Intervention End Date
2026-08-31

Primary Outcomes

Primary Outcomes (end points)
Willingness to pay taxes measured on a 0 to 10 scale.
Primary Outcomes (explanation)
The primary outcome is respondents’ stated willingness to pay taxes, measured after the information feedback stage and after the policy statement. Willingness to pay taxes after the information feedback stage is measured by asking respondents how likely they would be to pay taxes on their business profit after receiving factual information related to their prior beliefs. Willingness to pay taxes after the policy statement is measured using the same question after respondents receive the policy statement. The outcome is measured on a 0 to 10 scale, where 0 means completely unwilling and 10 means fully willing.

Secondary Outcomes

Secondary Outcomes (end points)
Willingness to register a business after the intervention, preferred tax amount after the intervention, and posterior beliefs.
Secondary Outcomes (explanation)
The secondary outcomes capture additional changes in respondents’ tax compliance preferences and belief updating after the information and policy interventions. These include willingness to register a business, the preferred tax amount respondents are willing to pay out of 100 Kwacha profit, and posterior beliefs, all measured after the interventions.

Experimental Design

Experimental Design
Information provision experiment:
This study uses an individual-level randomized information provision design. Eligible informal sector business owners and operators complete the baseline survey questions before treatment assignment. Randomization is implemented within the survey instrument, and each respondent is assigned to one of four study arms.
The design allows the study to compare how different types of information affect respondents’ tax compliance preferences. The survey is organised so that prior beliefs are elicited before any treatment-specific information is given, and key preference measures are collected after the information and policy statement stages.
Experimental Design Details
Not available
Randomization Method
The sampling draw from the informal business frame is conducted separately using R software with a fixed seed.

Computer generated individual level randomization into four arms is conducted using the KoboToolbox CAPI instrument randomization function after consent, eligibility screening, and baseline questions. Treatment assignment in KoboToolbox is also randomized through the survey instrument.
KoboToolbox is an open source digital data collection platform used to design, deploy, and manage electronic survey forms for research and field data collection. See https://support.kobotoolbox.org/functions_xls.html
Randomization Unit
Individual informal sector business owner or operator.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Not applicable. The study is not cluster randomized; treatment is randomized at the individual respondent level.
Sample size: planned number of observations
2,500 informal sector business owners or operators.
Sample size (or number of clusters) by treatment arms
625 respondents in the placebo control group;
625 respondents in Treatment 1, simplified registration information;
625 respondents in Treatment 2, localized public benefits information; and
625 respondents in Treatment 3, general public benefits information.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
The power calculation is based on an individual level randomized experiment, not a cluster randomized trial. With 2,500 respondents and four study arms, the planned allocation is 625 respondents per arm. The primary outcome is willingness to pay taxes, measured after the information feedback stage and again after the policy statement, both on a 0 to 10 scale. The study has 80 percent power under a two tailed test. The minimum detectable effect is approximately 0.14 standard deviations without adjustment and approximately 0.17 standard deviations under a conservative Bonferroni adjustment for multiple hypothesis. Assuming a standard deviation of 2.5 points on the 0 to 10 scale, this corresponds to approximately 0.35 points and 0.43 points, respectively.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Institutional Review Board of the Faculty of Economics and Business Administration, Friedrich Schiller University Jena
IRB Approval Date
2026-03-02
IRB Approval Number
2026-WIWI-013
Analysis Plan