Applying Behavioral Insights to Improve Tax Compliance in Papua New Guinea
Last registered on April 17, 2019

Pre-Trial

Trial Information
General Information
Title
Applying Behavioral Insights to Improve Tax Compliance in Papua New Guinea
RCT ID
AEARCTR-0004056
Initial registration date
March 26, 2019
Last updated
April 17, 2019 3:39 AM EDT
Location(s)

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Primary Investigator
Affiliation
Other Primary Investigator(s)
PI Affiliation
Australian National University
Additional Trial Information
Status
In development
Start date
2019-03-27
End date
2019-12-28
Secondary IDs
Abstract
The aim of this trial is to test the effectiveness of messages to improve tax compliance in Papua New Guinea (PNG) in a setting where the threat of punishment from non-compliance lacks credibility. We will test two types of interventions in collaboration with the Internal Revenue Commission (IRC). Firstly, we will test the effects of SMS messages on taxpayer behavior. Two alternative messages will be sent to taxpayers to remind them to lodge their tax return (Treatment Group 1A) and to inform them that their taxes are being used to fund education, healthcare and infrastructure (Treatment Group 2A). A control group will not receive any communication from the IRC over the duration of the trial (Control Group A). Taxpayers are being assigned randomly to the two treatment groups and to the control group. Secondly, we will test the effect of a flyer that is designed to encourage taxpayers to pay their taxes by informing taxpayers that their taxes are being used to fund education and healthcare. Taxpayers that receive a letter from the IRC for notification purposes will be randomly assigned to a group that will receive a letter and a flyer (Treatment Group 1B) and a group that will only receive a letter but no flyer (Control Group B).
External Link(s)
Registration Citation
Citation
Hoy, Christopher and Mathias Sinning. 2019. "Applying Behavioral Insights to Improve Tax Compliance in Papua New Guinea." AEA RCT Registry. April 17. https://www.socialscienceregistry.org/trials/4056/history/45015
Experimental Details
Interventions
Intervention(s)
Two types of interventions will be studied:

1. SMS messages: a message that reminds taxpayer to lodge their tax return (Treatment 1A) and a message that informs taxpayers that their taxes will be used to fund education, healthcare and infrastructure (Treatment 2A). The messages are attached in Appendix A at the end of the pre-analysis plan.

2. Flyer: a flyer that informs taxpayers that their taxes will be used to fund education and healthcare (Treatment 1B). A draft flyer is attached in Appendix A of the pre-analysis plan.

Treatments will be compared to randomly assigned control groups consisting of individuals who are not being contacted by the IRC over the duration of the trial. The treatment effect of each intervention will be measured by comparing average outcomes between treatment and control groups. No interaction between treatments will be tested.
Intervention Start Date
2019-03-28
Intervention End Date
2019-08-28
Primary Outcomes
Primary Outcomes (end points)
The main outcomes of interest are: Timing of SWT lodgement; Number of times SWT was lodged; Amount of SWT paid; Total payment of SWT; Number of employees reported by taxpayers; Timing of GST lodgement; Number of GST was lodged; Amount of GST paid; Gross income reported by taxpayer

Timing of Salaries and Wages Tax lodgement
Number of times Salaries and Wages Tax was lodged
Amount of Salaries and Wages Tax paid
Total payment of Salaries and Wages
Number of employees reported by tax payers
Timing of Goods and Services Tax lodgement
Number of Goods and Services Tax was lodged
Amount of Goods and Services Tax paid
Gross Income reported by tax payer
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We will test two types of interventions in collaboration with the Internal Revenue Commission (IRC). Firstly, we will test the effects of SMS messages on taxpayer behavior. Two alternative messages will be sent to taxpayers to remind them to lodge their tax return (Treatment Group 1A) and to inform them that their taxes are being used to fund education, healthcare and infrastructure (Treatment Group 2A). A control group will not receive any communication from the IRC over the duration of the trial (Control Group A). Taxpayers are being assigned randomly to the two treatment groups and to the control group. Secondly, we will test the effect of a flyer that is designed to encourage taxpayers to pay their taxes by informing taxpayers that their taxes are being used to fund education and healthcare. Taxpayers that receive a letter from the IRC for notification purposes will be randomly assigned to a group that will receive a letter and a flyer (Treatment Group 1B) and a group that will only receive a letter but no flyer (Control Group B).
Experimental Design Details
Not available
Randomization Method
For the SMS trial, de-identified baseline data were provided by the IRC for the population of taxpayers registered to pay Salary and Wages Tax (SWT) and Goods and Services Tax (GST). The baseline data were used for stratified randomization. A list of variables that was used to stratify is provided in Appendix B of the pre-analysis plan. Randomization was done in Stata using the command -randtreat- (version 1.4, 5 April 2017) using a random seed.

For the flyer trial, the population of taxpayers who missed the deadline for lodging taxes in the previous month is randomly divided based upon whether the last digit of their Tax Identification Number (TIN) is an odd or even number. Within this population, taxpayers with a TIN that is an odd number are assigned to receive a flyer in addition to the letter.
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
N/A
Sample size: planned number of observations
For the SMS trial, there are up to 23,489 taxpayers. For the flyer trial, it is expected there will be around 3,000-4,000 taxpayers.
Sample size (or number of clusters) by treatment arms
For the SMS trial, there are around 8,000 taxpayers in each group. For the flyer trial, there will be around 1,500-2,000 taxpayers in each group.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Australian National University Asia Pacific Delegated Ethics Review Committee
IRB Approval Date
2019-02-18
IRB Approval Number
2019/006 and 2019/005
Analysis Plan

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