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Increasing Tax Compliance for SMEs in Indonesia

General Information

Project description

Behaviorally informed messages have had demonstrated success in increasing tax compliance in multiple regional settings. In Indonesia, which has the largest economy in Southeast Asia, a trial from the Directorate General of Taxes (DGT) and World Bank teams looked at whether behaviorally informed messages and materials can impact tax compliance and payment rates among small and medium enterprises (SMEs). The results showed, to get delinquent firms to pay their taxes, information is not enough - one need an element of deterrence. To motivate current taxpayers to comply more accurately, providing simple information about the payment process is enough. Applied to the whole country, the treatment is a cost-benefit winner. With scaling in mind, the impacts of this intervention are meaningful and promising.

Detailed information

Final report: Is there a final report presenting the results and conclusions of this project?

Yes

Final report

Pre-analysis plan: Is there a pre-analysis plan associated with this registration?

No

Additional information

<h3>Does a third party implement the intervention or is this a collaboration with another team?</h3><div class="csp"><p>Directorate General of Taxes (DGT) </p> </div>

Who is behind the project?

Institution: World Bank
Team: eMBeD, Mind Behaviour and Development team

Project status:

Completed

Methods

Methodology: Experiment, Field Experiment
Could you self-grade the strength of the evidence generated by this study?: 1
Start date: 09/01/2018

What is the project about?

Policy area(s): Finance
Topic(s): Compliance
Behavioural tool(s): Planning, Reminders

Date published:

25 June 2021

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