Open AccessA Review of how Behavioural Insights have been Applied to Tax-Related Policy and Field Experiments in the European Union
Author(s) -
Michal Müller
Publication year - 2021
Publication title -
ekonomski pregled
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.134
H-Index - 9
eISSN - 1848-9494
pISSN - 0424-7558
DOI - 10.32910/ep.72.6.1
Subject(s) - public economics , deterrence theory , european union , compliance (psychology) , context (archaeology) , deterrence (psychology) , tax revenue , economics , revenue , tax policy , psychological intervention , empirical evidence , tax reform , business , political science , economic policy , accounting , law and economics , psychology , social psychology , law , paleontology , philosophy , epistemology , psychiatry , biology
Tax evasion is a problem in every country. Since taxesare the most important source of income for the state budget, finance ministersand tax authorities strive to increase tax compliance and secure higher taxrevenues. In the context of European Union objectives to monitor the effects ofbehavioural insights and gather information for critical evaluation, thisarticle contributes to these efforts by summarizing policies and measuresrelated to increasing tax compliance. This article is based on a systematicreview and is complemented by other relevant sources related to applyingbehavioural insights to tax policy. The article concludes that although thereis empirical evidence to suggest that behaviourally informed initiatives andinterventions have had a significant impact on tax compliance in the shortterm, there is not enough evidence to draw conclusions on the long-termeffects. In addition, the real motives and causal mechanisms that have led toincreased tax compliance are not entirely clear. The results of the researchsuggest that deterrence is an important factor. Although deterrence mightincrease tax compliance, it is uncertain whether it has any positive effect ontax morale in general. The article raises the argument that many behaviourally-informedtechniques are actually based on deterrence. In this respect, the article callsfor further research to reveal the real effects of behavioural insights.Further work on reviewing and evaluating research results will also beimportant, as individual initiatives across EU countries are not easilytraceable. This fact represents the limits of this study and highlights opportunitiesfor future research.