Pecuniary and Non-Pecuniary Motivations for Tax Compliance: Evidence from Pakistan

72 Pages Posted: 18 Mar 2019

See all articles by Joel B. Slemrod

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Obeid Ur Rehman

University of Michigan at Ann Arbor - Department of Economics

Mazhar Waseem

University of Manchester

Multiple version iconThere are 3 versions of this paper

Date Written: February 2019

Abstract

We examine two Pakistani programs to explore the role of deterrence as well as social and psychological factors in the tax compliance behavior of agents. In the first of these programs, the government began revealing income tax paid by every taxpayer in the country. The second program publicly recognizes and rewards the top 100 tax paying corporations, partnerships, self-employed individuals, and wage-earners. We find that both public disclosure and social recognition of top taxpayers caused a substantial increase in tax payments. We explore the drivers of this behavior, including the shift of social norms toward compliance.

Keywords: tax evasion, income tax, social norms

JEL Classification: H24, H25, H26

Suggested Citation

Slemrod, Joel B. and Ur Rehman, Obeid and Waseem, Mazhar, Pecuniary and Non-Pecuniary Motivations for Tax Compliance: Evidence from Pakistan (February 2019). Available at SSRN: https://ssrn.com/abstract=3342536 or http://dx.doi.org/10.2139/ssrn.3342536

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

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National Bureau of Economic Research (NBER) ( email )

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Obeid Ur Rehman (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

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United States

Mazhar Waseem

University of Manchester ( email )

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Oxford Road
Manchester, M13 9PL
United Kingdom

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