Publication:
Promoting Tax Compliance in Kosovo with Behavioral Insights

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dc.contributor.authorKarver, Jonathan
dc.contributor.authorHernandez, Marco
dc.contributor.authorNegre, Mario
dc.contributor.authorPerng, Julie
dc.date.accessioned2019-03-07T19:09:19Z
dc.date.available2019-03-07T19:09:19Z
dc.date.issued2019-03-01
dc.description.abstractAs in many countries, tax collection is a development challenge in Kosovo. Kosovo is one of the poorest and youngest countries in Europe in terms of gross domestic product (GDP) per capita and both demographics and statehood. The lack of an independent monetary policy — given that Kosovo has adopted the euro as the national currency — means that ensuring the sustainability of fiscal policy is critical. However, limited tax revenues hamper the government's ability to address economic cycles. Between 2011 and 2017, total government revenue amounted to about 14 percent of GDP, below the average of 19 percent among countries in Europe and Central Asia. Unlike other countries, Kosovar government relies on taxes for more than 85 percent of its revenues. Mobilizing tax revenues is therefore critical. The Tax Administration of Kosovo (TAK) requested assistance from the World Bank and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to address this challenge using an evidence-based approach. To this end, the World Bank and GIZ applied behavioral insights to promote tax compliance among specific groups of taxpayers. Three experiments were designed, implemented, and evaluated in 2018 that involved sending behaviorally informed reminders using letters, e-mails, and short messaging service (SMS) messages to various groups of taxpayers to induce timely and honest declarations and payments. The short-term objective of these trials was to increase the number and timeliness of tax declarations. Simple, behaviorally designed messages were effective in inducing tax declaration. Messages helped raise the tax declaration rate by an average of around 3 percentage points during a period of between four and six weeks. Among personal income tax (PIT) declarations, this represents a 59 percent increase in compliance, equivalent to over 200 more annual tax declarations among participants. The likelihood of payment rose in many instances, and no significant difference was found in the amounts of taxes paid. Lessons from the tax experiments in Kosovo highlight the benefits of rigorous impact evaluation and the need to establish processes that help integrate tax collection functions and data systems.en
dc.identifierhttp://documents.worldbank.org/curated/en/747661551725011887/Promoting-Tax-Compliance-in-Kosovo-with-Behavioral-Insights
dc.identifier.doi10.1596/31357
dc.identifier.urihttps://hdl.handle.net/10986/31357
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectTAX ADMINISTRATION
dc.subjectTAX COMPLIANCE
dc.subjectTAX COLLECTION
dc.subjectTAX REGISTRY
dc.subjectPOVERTY
dc.subjectVALUE ADDED TAX
dc.subjectTAXPAYERS
dc.titlePromoting Tax Compliance in Kosovo with Behavioral Insightsen
dc.typeReporten
dc.typeRapportfr
dc.typeInformees
dspace.entity.typePublication
okr.crossref.titlePromoting Tax Compliance in Kosovo with Behavioral Insights
okr.date.disclosure2019-03-04
okr.doctypeEconomic & Sector Work
okr.doctypeEconomic & Sector Work::Other Public Sector Study
okr.docurlhttp://documents.worldbank.org/curated/en/747661551725011887/Promoting-Tax-Compliance-in-Kosovo-with-Behavioral-Insights
okr.guid747661551725011887
okr.identifier.doi10.1596/31357
okr.identifier.externaldocumentum090224b086a14352_1_0
okr.identifier.internaldocumentum30876598
okr.identifier.report135032
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/747661551725011887/pdf/135032-WP-PUBLIC-Kosovo-Tax-Compliance.pdfen
okr.region.administrativeEurope and Central Asia
okr.region.countryKosovo
okr.topicPublic Sector Development::Tax Administration
okr.topicLaw and Development::Tax Law
okr.unitPoverty GP ECA (GPV03)
relation.isAuthorOfPublication9631eabd-4d84-55be-91a6-ee2e12a1030a
relation.isAuthorOfPublication.latestForDiscovery9631eabd-4d84-55be-91a6-ee2e12a1030a
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