One Size Does Not Fit All: A Field Experiment on the Drivers of Tax Compliance and Delivery Methods in Rwanda

The literature in this report focused exclusively on high and middle-income countries. This paper begins to fill this gap by reporting on the results of a tax field experiment in Rwanda, while also focusing on some characteristics that may be common to other low-income countries. It evaluates an intervention carried out by the Rwanda Revenue Authority (RRA), which involved sending messages to taxpayers to nudge their declaration behaviour during the filing period of January-March 2016. Particularly highlighting business profits tax. This study is designed to address two interrelated questions. Firstly, it questions what the key drivers are of compliance in Rwanda? Secondly, what the best delivery method is to reach taxpayers with messages designed to improve compliance? Although other studies have explored delivery methods in the context of taxpayer communication, our study is the first one to interact these methods with different message contents. As a result, we evaluate a set of nine treatments that combine three message contents (deterrence, fiscal exchange, reminders) and three delivery methods (letters, SMS, emails) – as compared to a control group that received no message.