Are people more likely to file their tax returns correctly if they receive a thank-you in advance or afterwards? Analyses show that thank-you messages have no effect on compliance behaviour.

Why this experiment was conducted: positive alternative sought
To encourage citizens' tax compliance (i.e., paying their taxes on time and correctly), it is occasional practice to emphasise the risk of checks and fines in case of non-compliance. One drawback of this deterrent method is that it can damage citizens' and businesses' trust in the authorities. It is important, therefore, to identify or develop friendlier methods of increasing tax compliance. According to research in psychology, showing gratitude for an expressed behaviour can be perceived as a reward and, in turn, can promote repetition of the behaviour. This was the theoretical background of the research that was commissioned by the Dutch Tax and Customs Administration on the effectiveness of thank-you messages on tax compliance.

Type of intervention: thank-you message, in advance or afterwards
To investigate this, an experiment was conducted amongst UK citizens. The 198 participants in the experiment were presented with a task in which they allegedly earned income and were asked to file a tax return. Participants were thanked in advance, thanked afterwards, or not thanked for paying their tax, by using the messages 'Thank you in advance for paying your tax' and 'Thank you for paying your tax', or with no message. Following a norm of reciprocity, participants might be more willing to comply with the request or repeat the behaviour for which they were thanked.

Method used: RCT
To measure the effect of a thank-you message on participants’ tax compliance, the experiment consisted of several rounds. Four times, participants were given a task to perform and were paid for it (i.e. earned income). Subsequently, they fled four tax returns for the various incomes they had earned. After fling their tax returns, participants were also asked to evaluate the likelihood of being checked. Participants were randomly assigned to one of the following three conditions (procedure within brackets):
• No thanks (control) condition [tax return 1 → tax return 2 → tax return 3 → tax return 4 Thank you afterwards condition [tax return 1 → thank you for fling tax return 1 → tax return 2 → thank you for fling tax return 2 → tax return 3 → thank you for fling tax return 3 → tax return 4 → thank you for fling tax return 4]
• Thank you in advance condition [thank you for fling tax return 1 → tax return 1 → thank you for fling tax return 2 → tax return 2 → thank you for fling tax return 3 → tax return 3 → thank you for fling tax return 4 → tax return 4]

Result obtained: no increased or decreased compliance
Results showed no significant increase or decrease in tax compliance across the four tax returns (see Figure 26). In all four rounds, about the same percentage of participants fled their tax returns correctly. Moreover, results also showed no significant difference in tax compliance between participants in the three conditions. That is, participants who were thanked in advance or afterwards were, on average, just as compliant as those who received no thank-you message.

Impact: understanding what might work
This study highlights possible contributors to tax compliance. It was not found that a thank-you message for paying taxes, either in advance or afterwards, had an effect on tax compliance. It could be that thank-you messages are effective in interpersonal settings, but not in an interaction between individuals and organisation, the context we used in this study. It was found, however, that the perceived likelihood of being checked was positively related to tax compliance. This finding corroborates findings from previous research (Asnawi, 2013; Hallsworth, 2014).

Source:
https://www.binnl.nl/home+-+en/knowledge/publications/bin+nl+publications/HandlerDownloadFiles.ashx?idnv=2719979