This paper studies the impact of “nudges” on taxpayers with varying tax compliance histories in Papua New Guinea. We present the results from two population-wide randomized controlled trials in a setting that is characterized by low compliance rates and a lack of eﬀective enforcement. We test the impact of text messages, ﬂyers and emails that remind taxpayers of declaration due dates and provide information about the public beneﬁts from paying tax. We ﬁnd that the treatments increased the number of tax declarations ﬁled without increasing the amount of tax paid because the taxpayers who responded to the nudges were largely exempt from paying tax. This result is consistent across tax types, communication channels and time periods. We also ﬁnd that the treatments had no impact on previously non-ﬁling taxpayers. Collectively, our results indicate that taxpayers who face the lowest cost from complying are most likely to respond to a nudge.
JEL-Classiﬁcation: C93, D91, H2, H20, O1, O17
Keywords: Tax Compliance, Field Experiments, Behavioral Economics