The Value-Added Tax (VAT) constitutes one of the most important sources of revenue in most countries. Consequently, policy initiative to strengthen VAT compliance is considered an important area of tax design in countries around the world. Issues of VAT compliance are particularly severe at the last stage of the value chain, when firms sell to final consumers, as consumers have little incentives to ensure that firms report sales to the tax authorities. In collaboration with the Rwanda Revenue Authority, we are seeking innovative ways to incentivize consumers to participate in VAT enforcement schemes.

Our Research
We are carrying out a series of surveys to better understand consumers’ views and concerns in relation to both existing VAT compliance strategies and potential reforms to these strategies. We plan to implement randomized policy experiments to examine which types of consumer incentives are most effective at citizens’ participation and firms’ VAT compliance.

Primary Investigators:
Anders Jensen, Harvard University
Francois Gerard, Columbia University
Joana Naritomi, London School of Economics
Gabriel Tourek, Harvard Kennedy School
Andrew Zeitlin, Georgetown University

This research is supported by:
International Growth Centre