Pecuniary and non-pecuniary motivations for tax compliance

Joel Slemrod, Obeid Ur Rehman, Mazhar Waseem, 15 May 2019

Governments typically seek to reduce tax evasion by increasing the odds of catching tax evaders or by raising the punishments. Using social and psychological motivations may offer another approach to promoting tax compliance. This column analyses two Pakistani initiatives – public disclosure of income taxes and a recognition-and-rewards programme for top taxpayers – and shows that, to the extent that they are effective in influencing private and social behaviour, they potentially offer a cost-effective complement to standard tax-evasion measures. 

Shaming and tax compliance

Nadja Dwenger, Lukas Treber, 30 October 2018

Many tax authorities use public shaming as a penalty for tax non-compliance. Yet, we lack empirical evidence on how the introduction of naming and shaming affects behaviour. This column uses a new policy in Slovenia to argue that shaming is an effective tool for tax enforcement, reducing tax debt by about 8.5%.

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