Daily Times

In this age of information overload, the pivotal role of media in influencing human psyche and public opinion cannot be over emphasized. It is quite reassuring to witness that there are multiple ways to reach out to taxpayers and thereby raise public awareness about tax compliance. That is precisely why tax administrations across the globe use a wide array of options to promote a culture of tax. Many tax administrations have launched programs to inform taxpayers of specific issues, obligations, and deadlines. They have also launched initiatives aimed at getting in touch with taxpayers at specific locations, such as fairs, or even reaching them at home through customized advertisements, TV shows or magazines. In case of taxpayers who cannot be reached through these channels and to deliver specific messages, tax administrations have also created communication plans, sometimes with the participation of academics and scholars. As the tax system relies on voluntary compliance, it is important to ensure sufficient awareness of the laws and any changes made therein. As initiatives that essentially advertise the tax system are potentially a useful tool, some of the most common ones include mass media, such as TV or radio, internet (including social media), direct contact, and publications which convey messages to a wide range of taxpayers. While most advertised campaigns focus on tax laws, some – especially those focusing on the informal sector – take a different approach. Raising awareness of the societal benefits of public spending enabled by tax is an aspect highlighted in some initiatives. In several countries, the targets of campaigns for formalization are not informal businesses directly, but rather their customers in an effort to change their behavior by demanding tax receipts, thereby forcing sellers to adapt. When people avoid buying goods from the informal sector, sellers start to comply with tax laws.

It is commonly held that taxpayers are often unaware of their rights and obligations. For example, in Africa, difficulty in accessing information about taxes has been found to be correlated with a lower willingness to pay taxes. In such situation, mass information campaigns may be a useful tool to help build tax morale. Tax administrations can use information campaigns to inform taxpayers of the general tax codes or update them on new tax legislation. Such campaigns can use one or more of a variety of communication media. For example, they can engage with taxpayers through social networks and call centers, explaining what taxes are for and how they are spent. Campaigns can be run on general tax compliance issues as well as on particular pieces of legislation that are either new or that generally see a low compliance rate. This was the case, for instance, in Israel, where the Israel Tax Authority (ITA) ran a campaign to nudge taxpayers to comply with new legislation prohibiting the use of cash for certain payments and transactions, in force as of 2019. The campaign was launched in December 2018 and encompassed material diffused through radio, TV, internet, press, and social media. Moreover, it included billboards and meetings with the bureaus of tax representatives. Before the campaign was launched and funded – in late November – the ITA conducted interviews and provided write-ups in the media.

It is also true that covering a large part of the population could be a massive challenge, but most of the tax administrations overcame it by mixing different channels of communication.

Likewise, TV and radio programs are also a useful means to reach out to different categories of taxpayers. Some administrations, like the Tanzania Revenue Authority and the National Revenue Authority of Sierra Leone, use both national and local radio and TV channels to maximize the impacts. National channels are used for more generic taxpayer information or announcements and advertisements that apply to the majority of taxpayers, while local radios are used to reach out to specific taxpayers in a region or district. Apart from obligations, it is also important that tax administrations highlight how taxes are spent and distributed. Showing taxpayers the social utility of taxes can help change their perceptions about tax, which too often overemphasize the costs while dismissing the benefits. For them to adopt a more co-operative behavior, citizens must be aware that contributing to taxes benefits every citizen – including themselves. The French Ministries for Economy and Finance, and its Public Action and Accounts have dedicated a section on their website to explaining the benefits and the use made of taxpayer monies: What are my taxes for? Apart from creating a dedicated website, it is also possible to annex such information to tax returns or to include it in larger initiatives, for instance within an information campaign. The message can take many forms, such as graphs or texts, but is most efficient when taxpayers can relate to it. For instance, as in Ivory Coast, it may be useful to explain what it represents in terms of infrastructure such as hospitals, schools, etc.

Similarly, to maximize tax compliance and tackle the informal sector, tax administrations can reach out to taxpayers through a range of campaigns, which constitute alternative ways of communicating with them to ensure that they adopt beneficial behavior – for instance encouraging them to control that shops and stores produce invoices, to pay their taxes on time and to adopt taxpayer identification numbers. The types of campaigns vary and can include means of incentivizing people to adopt desirable behavior. This is for instance the case where collecting receipts can lead to a tax deduction or the participation in lotteries. For instance, the Lithuanian tax administration (STI) put in place a National Receipt Lottery targeting the riskiest categories of taxpayers (restaurants, car services, spa centers and marketplaces). Portugal’s Tax and Customs Authority (TCA) organized a Lucky Invoice Draw to promote tax compliance, inform citizens and tackle tax evasion and fraud. This lottery awards prizes, at random, to customers who have purchased goods or services within the national territory and have requested the issuance of invoices with their TIN (taxpayer identification number). Pakistan has also launched a similar POS Invoicing Prize Scheme to incentivize citizen taxpayers to shop only from Tier-01 Retailers whose tills are integrated with FBR’s POS System. In such cases, the main goal is not only to inform taxpayers about rules or deadlines, but also to convince them of the power of acting collectively. These campaigns aim to reach the widest audience possible and to reduce the informal sector in an indirect way by ensuring that tax collected at the point of sale is actually deposited in state exchequer.

It is also true that covering a large part of the population could be a massive challenge, but most of the tax administrations overcame it by mixing different channels of communication. One of many examples is the Irish communication programs. Another option is to run several campaigns each year, as was the case for the Malaysian tax administration. Changing people’s perceptions of tax is not an easy task. The most successful initiatives implemented by tax administrations are those that do not only inform taxpayers about their rights and duties but do so in an innovative way. This can entail providing reasons why taxpayers are better off paying taxes, apart from highlighting the possibility of incurring sanctions. There are no two opinions that one of the most effective way to build an enduring and positive relationship with taxpayers is to remain present in their daily lives. This can be done through TV programs broadcasted before or after the evening news, or through magazines edited to present tax issues in a playful and simple way. Organizing events around the theme of tax citizenship is also a common way to promote compliance, especially during the tax filing season.

These events are good opportunities for tax administrations to gather key stakeholders and deliver messages to them in a positive manner. It is also an admitted fact that making tax a part of day-to-day life can help taxpayers feel closer to tax administrations and make officials seem more approachable. Thus, tax compliance can be maximized by creating an enabling environment through a robust and reliable communication strategy which seeks to engage with mainstream media to educate taxpayers and thereby aware people at large about their duties towards the state including ensuring tax compliance.

The writer is a civil servant by profession, a writer by choice and a motivational speaker by passion!