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Public Disclosure and Tax Compliance: Evidence from Uganda

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Version 2 2024-09-03, 09:09
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posted on 2024-09-03, 09:09 authored by Priya Manwaring, Tanner Regan

In many countries, tax administrations have only a low capacity to enforce tax collection. In such circumstances, public disclosure policies – where the compliance and/or non-compliance of taxpayers is made public – are an appealing tool to raise compliance. However, the effect of such policies in low-compliance settings is not well understood. Through a field experiment conducted in 2021 with over 65,000 property taxpayers in Kampala, Uganda, we study the effects of reporting delinquents and recognising compliers. While the threat of publicly disclosing delinquency raises compliance, subsequently disseminating delinquent behaviour lowers the compliance of others. Public recognition has even more consistent perverse effects: it lowers compliance both for those promised recognition and for other taxpayers who receive this information. These results are consistent with a model of tax evasion where taxpayers wish to avoid being known as tax-eligible (property owners in this case) and where there is limited shame in delinquency. Public dissemination of information on tax behaviour reduces overall compliance by indicating to taxpayers that actual compliance rates are lower than they had previously believed. Overall, public disclosure policies in this context are ineffective at raising revenue, and sending enforcement reminders is more effective.

History

Publisher

Institute of Development Studies

Citation

Manwaring, P. and Regan, T. (2024) Public Disclosure and Tax Compliance: Evidence from Uganda, ICTD Working Paper 208, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.063

Series

ICTD Working Paper 208

Version

  • VoR (Version of Record)

IDS Item Types

ICTD Working Paper Series paper (non-IDS)

Copyright holder

© Institute of Development Studies 2024

Country

Uganda

Language

en

IDS team

ICTD

Identifier ISBN

978-1-80470-219-2

Pagination

83pp

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    International Centre for Tax and Development

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