The direct and indirect effects of messages on tax compliance: Experimental evidence from Peru

We carry out a randomized controlled trial to evaluate the effect of three types of messages sent to taxpayers on their compliance with the rental income tax (direct effect) and the spillovers produced on the capital gains and the self-employment income taxes (indirect effects). One message highlights detection, other appeals to social norms, and the third appeals to altruism. We also perform a 15-month follow-up to determine if the treatment increases tax revenues in a sustained manner. We find that the message addressing detection produces a positive and sustained direct effect and a negative spillover on the other two taxes. The “social norms” message has no direct effect but produces a sustained negative spillover on the capital gains tax. The message appealing to altruism produces a transitory negative effect and no statistically significant spillovers. We show there is substantial risk of overestimating the tax revenues produced by the messages if one relies only on their direct effects.