Why Don’t Firms File Tax Returns on Time? Evidence from the Indian GST

Information is central to tax enforcement, and taxpayers’ regular filings provide crucial information for the enforcement of value-added taxes (VAT). Yet, some taxpayers either do not file their returns or file them a long time after the deadline. With tax filings completely digitised in many countries, it is surprising that filing non-compliance remains high. IMF data suggest that between 20 and 60 per cent of eligible returns are unfiled across all major taxes, especially in low-income countries (Brockmeyer et al. 2019). This paper reports on an attempt to improve filing compliance for the Indian VAT, known as the Goods and Services Tax (GST), through low-cost behavioural nudges.

Summary of ICTD Working Paper 207.