Threats of audits and tax morale in Africa: evidence from randomized field experiment in Ethiopia

Last registered on January 21, 2022


Trial Information

General Information

Threats of audits and tax morale in Africa: evidence from randomized field experiment in Ethiopia
Initial registration date
January 18, 2022

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
January 21, 2022, 10:53 AM EST

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



Primary Investigator

African Economic Research Consortium

Other Primary Investigator(s)

PI Affiliation
PI Affiliation
Ethiopian Policy Studies Institute

Additional Trial Information

Start date
End date
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.

Low-income countries suffer from both weak state capacity to mobilize taxes and chronic underdevelopment that reinforce each other. As a result they collect very low tax revenue as a share of their GDP, compared with high income countries. This has partly led to chronic fiscal deficit, often resulting in rising debt levels, macroeconomic instability, growth volatility, and limited provision of basic social services. With the rising debt vulnerability in many low-income countries, improving domestic tax mobilization has become more critical. However, economic structure dominated by a large informal sector, culture of poor tax compliance due to weak institutions, and pervasive corruption remain serious impediments. For example, 27% of individuals surveyed by Afrobarometer across 36 African countries believe that citizens should not pay taxes at all, and in some countries this figure was above 40%. One contributing factor for such adverse attitude towards tax compliance is low level of trust on government, including on tax authorities, who are generally perceived to be highly corrupt . This paper examines the impact of two prominent strategies, threat of audits and persuasions/positive incentives, that could improve tax compliance and provides evidence using novel data generated from fully randomized field experiment in Ethiopia. The experiment involved approximately 5000 businesses operating in Addis Ababa. The experiment was conducted during 2012 for two randomly selected groups in collaboration with revenue authorities. A duly signed letter of threat and a complementary letter from the revenue authority was hand delivered to the treatment groups. To avoid possibility of information sharing among recipients of the treatment letters, the timing was chosen such that it coincided at the fiscal year when businesses were expected to file profit tax returns. The threat letter contained information that the said firm had not been complying with its tax obligations and following that the revenue authority would undertake an audit that fiscal year. The letter also stated the penalties associated with tax evasion including financial payments as well prison terms. The 'persuasive letter" described in detail the positive behavior of the tax payer in complying with its duties' and provided information how because of such tax payers the country was able to make remarkable achievements in the areas of infrastructure development, education, health and other areas of development. The control group did not receive any letter. All other information about the businesses was obtained from administrative data maintained by the revenue authorities.
External Link(s)

Registration Citation

Abebe, Abebe Shimeles, Daniel Zerfu Gurara and Firew Woldeyes. 2022. "Threats of audits and tax morale in Africa: evidence from randomized field experiment in Ethiopia." AEA RCT Registry. January 21.
Experimental Details


Hand delivered letters were sent to treatment groups
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
Tax returns
Primary Outcomes (explanation)
Tax evasion or compliance

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
5,000 business were randomly selected from a universe of businesses that were registered with the revenue authority. The design of the sample selection applied stratification by size (small, medium, large), forms of ownership (public, private , PLC) and location (to account for agglomeration). The treatment groups received two types of letters from the Ministry of Revenue. One group received a letter containing messages of threats of audit, and associated penalties if evidence was found. For that the letter stated that an audit would be launched shortly. The persuasion letter described in detail the good behavior demonstrated by the frim in consistently complying with its tax obligations. As a result of this, the letter stated that the country has made enormous progress in the areas of infrastructure development, was The letters were hand delivered to send a message that the revenue authority meant business. The control group did not receive any letter. To avoid possible information sharing and contamination of the experiment, the distribution of letters was purposely made to coincide with the period in which firms file their profit tax returns.
Experimental Design Details
Randomization Method
Random letters
Randomization Unit
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
5000 firms
Sample size: planned number of observations
5000 firms
Sample size (or number of clusters) by treatment arms
5000 firms
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


Post Trial Information

Study Withdrawal

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Is the intervention completed?
Data Collection Complete
Data Publication

Data Publication

Is public data available?

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials