Nudging new entrants to the tax system to comply

Last registered on May 21, 2018

View Trial History

Pre-Trial

Trial Information

General Information

Title

Nudging new entrants to the tax system to comply

RCT ID

AEARCTR-0002962

Initial registration date

May 18, 2018

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

May 21, 2018, 11:51 AM EDT

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

Locations

Country

Australia

Region

Primary Investigator

Name

Mathias Sinning

Affiliation

Australian National University

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2018-01-01

End date

2018-11-30

Keywords

Governance

Additional Keywords

tax compliance, natural field experiment, behavioral insights, simplification

JEL code(s)

C93, H24, H26

Secondary IDs

Abstract

The aim of this trial is to improve the communication of the Australian Taxation Office (ATO) with new entrants to the tax system to increase tax compliance. New entrants to the tax system have to lodge a tax return for the first time. The trial will evaluate the effectiveness of nudge letters and emails that aim to create a positive and supportive first experience to encourage lodgement of a taxpayer's overdue tax return. The target population consists of individuals not in business who (based on data of the ATO) have never lodged an income tax return, have a requirement to lodge in 2017, have not lodged their 2017 income tax return, are new to the tax system in 2017 and would not otherwise be contacted by the ATO under existing risk treatments. Three treatments will be tested: (1) Treatment Group 1: individuals who receive a letter from the ATO stating that "We have not received your tax return"; (2) Treatment Group 2: individuals who receive a letter from the ATO stating "Welcome to the tax system - you need to lodge your first tax return" and providing details to help with the lodgement process; (3) Treatment Group 3: individuals who receive an email from the ATO including the same statement as (2) and providing details to help with the lodgement process. The treatments will be compared to a control group consisting of individuals who are not being contacted by the ATO. About 40,000 individuals were randomly assigned to the four groups (about 10,000 individuals to each group).

External Link(s)

Registration Citation

Citation

Sinning, Mathias. 2018. "Nudging new entrants to the tax system to comply ." AEA RCT Registry. May 21. https://doi.org/10.1257/rct.2962-1.0

Former Citation

Sinning, Mathias. 2018. "Nudging new entrants to the tax system to comply ." AEA RCT Registry. May 21. https://www.socialscienceregistry.org/trials/2962/history/29788

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Experimental Details

Interventions

Intervention(s)

Three treatments groups are considered: (1) Treatment Group 1: individuals who receive a letter from the ATO stating that "We have not received your tax return"; (2) Treatment Group 2: individuals who receive a letter from the ATO stating "Welcome to the tax system - you need to lodge your first tax return" and providing details to help with the lodgement process; (3) Treatment Group 3: individuals who receive an email from the ATO including the same statement as (2) and providing details to help with the lodgement process. The control group consists of individuals who are not being contacted by the ATO. Copies of sample letters and emails are attached in "Docs & Materials" of this registration.

Intervention Start Date

2018-02-26

Intervention End Date

2018-05-04

Primary Outcomes

Primary Outcomes (end points)

Variables related to individual lodgement, reporting and payment behavior are the key outcome variables. A list of variables that will be provided by the ATO after the trial registration is attached in "Docs & Materials" of this registration. The main outcome variables are (original variable names in parentheses):
- Binary lodgement indicator
- Lodgment date (Form_Rcvd_Dt)
- Balance of assessment of the income tax return (Lodged_Balance_of_Assessment)
- Difference between predicted and lodged balance of assessment/declared cash income (Difference_BOA)
- Indicator for lodgment on paper or electronically (Chnl_Ctgry_Dcd)
- Indicator for amendment after lodgment (Amendment)
- Tax agent indicator (Ldgmt_Prprr_Typ)
- Lodgment through ATO online system (ATOOnline_Logon_Count_by_Date)
- Use of myTax (LU_Src_Lng_Dcd)
- New myTax registration (New_MyGov_Registration)
- Count of inbound calls relating to the letter / email (Inbound_Call_Count)
- Change in address can be observed (New_Postal_Address)

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

About 40,000 individuals were randomly assigned to three treatment groups and a control group (about 10,000 individuals were assigned to each group).

Experimental Design Details

Randomization Method

A random list of the full population was created by the ATO using simple randomization. Individuals with email addresses were first drawn from the random list and assigned to Treatment Group 3. The remaining cases were assigned to Treatment Groups 1 & 2 and to the Control Group.

Randomization Unit

Individual taxpayers.

Was the treatment clustered?