Favouring Tax Compliance Through a Simple Automatic Payment Option: Evidence from a Lab Experiment

Key Points

• Automatic payment options significantly increase tax compliance rates among participants in the lab experiment.
• The experiment observed enhanced compliance due to the simple, hassle-free payment method introduced.
• This lab experiment applied principles of behavioral economics to assess the impact of financial incentives on tax adherence.
• Findings suggest that implementing such automatic options could lead to broader tax compliance in real-world scenarios.