Nudging Businesses to Pay Their Taxes: Does Timing Matter?

Last registered on June 13, 2018
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Pre-Trial

Trial Information

General Information

Title
Nudging Businesses to Pay Their Taxes: Does Timing Matter?
RCT ID
AEARCTR-0003059
Initial registration date
June 09, 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
June 13, 2018, 8:10 PM 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
Christian Gillitzer
Affiliation
University of Sydney
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Other Primary Investigator(s)

PI Name
Mathias Sinning
PI Affiliation
Australian National University
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2017-05-26
End date
2017-07-14
Keywords
Finance & Microfinance, Firms & Productivity
Additional Keywords
tax compliance, business taxation, behavioural insights
JEL code(s)
C93, H25, H26
Secondary IDs
Abstract
The Australian Taxation Office (ATO) sends a reminder letter to business taxpayers who have missed their tax debt due date. This trial evaluated the effect of varying the send date of the reminder letter. The target population is restricted to taxpayers with a history of compliant payment behaviour over at least the previous three years. The trial was conducted based on the 26th May 2017 Business Activity Statement (BAS) lodgment date. 4,787 unpaid debt cases were quarantined from the usual ATO treatment pathways. Debt cases were randomly allocated to receive a reminder letter in either the first, second, or third week following their missed tax debt due date; a control group did not receive a letter for the duration of the trial. An equal number of quarantined debt cases were randomly assigned to each of the treatment groups and to the control group. The outcomes of interest are: (1) the number of days since the tax debt due date until payment is received, including information on partial payments; and (2) details of any payment arrangements clients may have entered into during the trial.
External Link(s)

Registration Citation

Citation
Gillitzer, Christian and Mathias Sinning. 2018. "Nudging Businesses to Pay Their Taxes: Does Timing Matter?." AEA RCT Registry. June 13. https://doi.org/10.1257/rct.3059-1.0
Former Citation
Gillitzer, Christian and Mathias Sinning. 2018. "Nudging Businesses to Pay Their Taxes: Does Timing Matter?." AEA RCT Registry. June 13. https://www.socialscienceregistry.org/trials/3059/history/30711
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Experimental Details

Interventions

Intervention(s)
The trial was conducted based on the 26th May 2017 Business Activity Statement (BAS) lodgment date. Cases with overdue tax debts were randomly allocated to receive a reminder letter in either the first, second, or third week following their missed tax debt due date; a control group did not receive a letter for the duration of the trial. All cases will be quarantined from the ATO’s usual treatment pathways until July 14, 2017.
Intervention Start Date
2017-06-07
Intervention End Date
2017-06-22

Primary Outcomes

Primary Outcomes (end points)
The outcomes of interest concern (1) payment rates; and (2) payment arrangements entered into by taxpayers during the trial to resolve their outstanding debts. The specific outcome variables of interest are:
• Payment in full (Yes/No);
• Amount of tax debt payment (in AUS$).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Overdue debt cases with a May 26th lodgement date were randomly al- located to receive a letter in either the first, second, or third week following their missed tax debt due date; a control group did not receive a letter for the duration of the trial. A letter was not sent if payment in full was received in the period between the allocation of cases to treatment groups and the date the case was scheduled to be sent a reminder letter. The first step of the randomisation procedure involved grouping the tax debt cases into strata with similar baseline characteristics. Within each strata, each case was assigned at random to one of the treatment groups or to the control group. This stratification procedure ensured that the mix of tax debt case baseline characteristics was similar across the treatment and control groups. Primary interest is comparison of the outcome variables between each of the treatment groups and the control group, under the null hypothesis that letter treatment has no effect on each of the outcomes of interest; pairwise comparisons of outcomes will also be made across the treatment groups.
Experimental Design Details
Randomization Method
Randomisation was based on a random variable generator in STATA, using a random choice of the underlying seed. The user-written command randtreat version 1.4 (5 April 2017), available from the ssc library, was used for stratified randomisation.
Randomization Unit
Taxpayer level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
4,787 taxpayers
Sample size: planned number of observations
4,787 taxpayers
Sample size (or number of clusters) by treatment arms
4,787 taxpayers; one-quarter assigned at random to the Week 1 letter group, Week 2 letter group, Week 3 letter group and the control group.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
We suppose 1,500 cases in the Week 3 group remain unpaid three weeks after their tax debt due date and are sent a reminder letter. We consider the power to detect a difference in payment rates between the Week 3 letter group and the control group at the conclusion of the trial. A worst case scenario consists of the following assumptions: N=3,000 in the treatment and control groups, the share of unpaid cases in the control group equal to 0.5, a test with power of 0.9 and size 0.05, for a two-sided hypothesis test. Under these assumptions, the minimum detectable difference in payment rates between the treatment and control groups is 6 percentage points.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
ANU Human Ethics Committee
IRB Approval Date
2017-06-09
IRB Approval Number
2017/454
Analysis Plan

Analysis Plan Documents

Analysis plan

MD5: de4471feb73ff9bf9a4f1987fab73e4c

SHA1: 12565f88125408b7140948ba666d8f4aa00f2234

Uploaded At: June 09, 2018

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
July 14, 2017, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
July 14, 2017, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
4,787 taxpayers
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
4,787 taxpayers
Final Sample Size (or Number of Clusters) by Treatment Arms
4,787 taxpayers; one-quarter assigned at random to the Week 1 letter group, Week 2 letter group, Week 3 letter group and the control group.
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials