| Abstract: |
In recent years, tax administrations around the globe have leveraged digital
transformation to enhance processes and services to improve tax compliance.
Massive self-regularization platforms, which identify noncompliant taxpayers,
notify them about the detected inconsistencies, and allow them to amend the
situation with the tax authority, are prominent examples of the digital
transformation of tax administrations. This study presents the results of the
randomized controlled trial evaluating the effectiveness of such a
self-regularization platform in the Brazilian State of Para. The results show
that the platform increased the amount of the taxes paid by 12.78 times and
the probability of tax compliance by 236 percent. Overall, the effectiveness
of self-regularization in recovering the evaded tax is 60 percent higher than
that of the traditional audit-based approach. The amount of the correction in
the declared tax increased by 2.33 times, and the probability of correction by
300 percent. Given the low marginal cost of self-regularization, the results
suggest that these platforms are a remarkable opportunity for tax
administrations to leverage digital transformation effectively and
efficiently, improving tax compliance and increasing tax revenue. |