2. A classification of taxpayer education initiatives

The broad range of taxpayer education initiatives makes it difficult to provide meaningful analysis without some form of classification. As already identified in the 2015 study, taxpayer education initiatives can take many forms. While this suggests that taxpayer education initiatives can adapt to address the range of objectives tax administrations may have for such initiatives, it also means there is a need for further classification of initiatives to enable analysis and provide useful insights to help others conceptualise, design and implement their own initiatives.

Through the review of 140 initiatives from 59 countries, it is possible to propose a typology of taxpayer education initiatives. A survey was undertaken to provide a global picture of the range of taxpayer education initiatives. By analysing these initiatives, a typology can be proposed, focusing on the approach the initiatives take: in-depth teaching, awareness-raising communication, or providing practical assistance. Each of these three broad categories can be further subdivided to provide a total of 8 categories of taxpayer education initiatives.

This chapter will provide an overview of the survey and the rationale for the classification proposed. In addition, the chapter will draw on data from the survey to provide further analysis, including the distribution of initiative types among developed and developing countries.

To obtain a global overview of the range of taxpayer education initiatives implemented by tax authorities, a survey of 59 countries was undertaken. While the 2015 study focussed primarily on developing countries, the intention for this study was to review the global approach to taxpayer education. As such, a survey was sent not only to all the countries featured in the 2015 study, but also to the 53 members of the Forum on Tax Administration. This gave a total of 77 countries to which the survey was sent, of which 59 provided responses.

Two forms of the survey were used: one for countries that had featured in the 2015 study, and another for new countries. Part of the objective of the survey was to track progress in the initiatives featured in the 2015 survey. As such, the slightly different survey sent to those countries that had featured in the previous report featured additional questions regarding progress on the initiatives reported in the 2015 study. Otherwise, the surveys were identical; all countries were encouraged to provide information on up to three initiatives in total. The survey was also made available in English, French and Spanish.

The responses covered a broad mix of countries, both geographically and by level of development. Figure 2.1 shows the distribution of the responses by continent, while Figure 2.2 shows the distribution by income classification. Thus, while the survey was not universal, the responses are sufficiently diverse to promote confidence that the responses cover the range of approaches being taken, offering a sound basis on which to base the classification described in the following section.

Analysis of the results of the survey reaffirmed the wide variety of taxpayer education initiatives. The initiatives described by tax administrations ranged from essay writing competitions for school children to tax-themed computer games or tax dialogues between businesses and the tax administration.

Such a wide variety means there are several potential ways to approach classifying taxpayer education initiatives. They could be classified by target group (businesses, individuals, children), by delivery mechanism (solely by tax administration or in partnership with others), or intensity of resources required.

The approach taken in this report is to establish a classification that focusses on the broad approach and objective of the initiative: teaching tax through in-depth engagement, communicating tax through awareness-raising campaigns, and practical assistance programmes to directly help taxpayers comply. This approach was chosen as it appeared to be the most practically useful classification for tax administrations looking to design and implement taxpayer education initiatives. The analysis revealed significant similarities across the initiatives within the three categories, especially around the challenges faced and solutions adopted, to provide practical guidance for tax administrations contemplating initiatives of similar types.

It is possible to further break down each of the three main categories to provide eight sub-categories. These sub-categories enable further granularity and make it easier to illustrate the practical approaches undertaken in taxpayer education initiatives (Chapters 3, 4 and 5).

Teaching tax initiatives look to create in-depth engagement with the participants and generally involve interactive dialogue between the participants and those delivering the programme. Teaching tax initiatives seek to communicate complex messages and promote deep thinking among the participants. These messages may vary, from the role of tax in citizenship to more technical aspects of the design and functioning of specific taxes, but they all require an approach that provides the time and space for participants to think, respond and ask questions.

Teaching tax initiatives generally require initial advertising or promotion to encourage participation. In contrast to communicating tax through awareness-raising initiatives, where the first contact with participants is often the objective, in teaching tax initiatives participants often need to be made aware of the initiative first, and then invited to register to participate. While this is not the case where tax is included in the school curriculum, and the students are effectively a captive audience, many of the school-based initiatives identified a related challenge of gaining awareness across the schools/teachers to enable the initiative to be delivered.

Teaching tax initiatives can be further sub-divided into three sub-categories, according to the target audience. The responses from the survey highlighted the varying approaches taken to different audiences, especially regarding the types of partnerships required to successfully deliver the initiatives. Given the intensive nature of these initiatives, partnerships appear important, be they with schools, teachers and ministries of education when teaching students; with business associations when delivering workshops to businesses; or with groups and associations with links to vulnerable groups when seeking to work with individuals.

Of the 140 initiatives reviewed, 64 aim at Teaching Tax (44 %); these were widely distributed globally. The most common (43 initiatives) focussed on students, followed by those focussed on businesses (14) and individuals (7).

Communicating tax initiatives are focussed on raising awareness among taxpayers regarding different aspects of the tax system. This can include awareness of rights and obligations or of changes in the tax system, or may address issues facing specific groups of taxpayers or promote improvements in the perception of the tax system and administration.

Communicating tax initiatives is often effectively a form of advertising, with less scope for dialogue and feedback. While some initiatives, especially those employing behavioural science approaches, can generate valuable data, in general, the communicating tax initiatives are more one-directional (and in some cases relatively passive), disseminating specific messages to the chosen audience. The focus of these initiatives is therefore often on the first impression; unlike Teaching Tax initiatives they do not generally seek deeper participant engagement in the initiative.

Communicating tax initiatives can be further sub-divided into three sub-categories, focussing on the objective of the communication. The responses from the survey identified similarities between initiatives with related objectives. While information campaigns may seek to communicate different information on the tax system, they all face similar challenges in identifying the right audience and selecting the best form through which to communicate the message. Initiatives focussed on building a positive image of the tax administration are united in addressing the challenge of how to present the tax system in a new light. Tailored initiatives all look at ways in which the messaging can be refined to target specific groups, or to nudge behaviour in a specific way.

The survey found that 53 initiatives focus on communicating tax (36%). Information campaigns are the most common (26 initiatives), but an increasing number of countries are aiming to build a stronger and more positive relationship with taxpayers through events or games (19). Both the information campaigns and initiatives looking at building a positive relationship are much more common in non-OECD countries, which provided 17 of the examples of information campaigns and 14 of the positive relationship examples. Tailored messaging to groups of taxpayers had eight examples, equally divided between OECD and non-OECD countries.

Practical assistance initiatives provide direct assistance to taxpayers in fulfilling their compliance obligations. Tax can be complex, especially for those unfamiliar with the compliance processes. For this reason, practical initiatives are an important part of taxpayer education in a number of countries.

Practical assistance initiatives can be integrated within the development of new tools and services. While new, generally digital tools and services are designed to make compliance easier, some taxpayers need support to encourage them to move to new tools. Practical assistance programmes can help in such transitions.

Practical assistance initiatives can be split into two sub-categories. The main difference identified in the survey in practical assistance initiatives was that a number of initiatives were specifically linked to the development and deployment of new tools and services; this creates additional considerations in comparison to initiatives that did not have such a link.

Providing practical assistance to taxpayers was the aim of 30 initiatives (20%). Non-OECD countries were more likely to identify this kind of initiative, providing 19 of them.

As outlined above, the three main categories can be subdivided to provide a more complete classification. Figure 2.3 shows the full classification.

Figure 2.4 shows the distribution of examples provided in the survey across the sub-categories. The most frequently used types of initiatives per category are teaching youth (29%) to share knowledge about taxes and tax systems, information campaigns (18%) to communicate on tax, and offering direct assistance (11%) to make taxpayers’ life easier. Nearly one initiative out of two therefore belongs to either the teaching youth or information campaign categories.

The results of our survey clearly show that tax administrations put a great emphasis on educating future taxpayers. Out of the 59 responding countries, 27 had at least one such programme up and running and 12 had more than one. Tax administrations are very creative, and the range of existing programmes is very broad, but one common feature is that they allow for reaching most of the children in a cohort. Some involve classroom teaching or debates, managed by the teacher or a tax official, while others allow students to experience tax administrations themselves. The aim is not to say, "paying your taxes is important", but to show why it is important: because it helps to build a better society.

These initiatives are collaborative in the sense that to be successful, other actors need to be involved. This can include, for example, ministries of education at a global level, or schools or universities at a more local one.

Teaching tax culture and citizenship at school is a long-term project which helps spread a culture of tax compliance in the entire society. This is not easy, as it requires the involvement of a wide range of actors (from teachers to ministries of education, universities and schools, etc.). It implies finding the right way to communicate with them (directly with school principals, through NGOs or ministries of education) without imposing an excessive burden on them. To address the latter point, tax authorities are making efforts to make materials available to teachers, for example on a dedicated page of their website. Teachers are in direct contact with students, and they first need to be convinced of the importance of taxation to then be able to carry an inspiring message to the youth. Thus, tax administrations must include actions directed at teachers in their programmes, or to have tax officials go to schools to directly share their knowledge.

Furthermore, to be effective programmes for youth need to be consistently pursued over years. This is a difficulty shared by all initiatives aiming at educating taxpayers, but it is more acute here because to maximise the effect of the programme it is desirable that students be exposed to education programmes at different levels during their studies, in primary and secondary school as well as at university. Schools and universities are also a good environment for more ludic initiatives like contests and competitions around tax issues. As in Japan, Lithuania or Spain, these can be fun and can make students think for themselves about why it is wrong to evade taxes.

Getting young people to work with tax authorities is an innovative way of using existing civil service programmes to help build a tax compliant society. These programmes are generally seen as a good way to improve citizenship by giving young people a sense of belonging to the nation. Their use as a means of educating future taxpayers is one way to achieve both objectives simultaneously.

In a world of instantaneity, it is interesting to see that tax administrations are thinking long term by favouring programmes with incremental effects over time. These programmes are, nevertheless, rarely used alone and out of the 27 countries having programmes to educate youth, 21 have other on-going programmes.

Businesses and especially small and medium-sized enterprises (SMEs) are also priority targets in many countries. In fact, 11 countries reported running programmes to better educate businesses, which can take the form of face-to-face meetings or seminars or use digital tools like webinars to reach a large audience.

Businesses may be concerned by a wide range of taxes and need precise and up-to-date information to be able to cope with their obligations. The level of technical detail to be provided is often high, requiring an approach that offers the time and space to convey all the information required, enable questions to be posed, and allow the content to evolve in response to the needs of the audience. For these reasons, these initiatives often take the form of seminars or meetings about a specific tax issue. Some tax administrations adapt their communication by focusing on specific, high-risks sectors or by asking in advance the issues that given taxpayers wish to see addressed.

Developing programmes for the public may be difficult due to logistical issues (especially when gathering a large number of taxpayers together). Webinars can help but they necessitate taxpayers being well connected to the Internet, and that is not always the case. One way to address this is, instead of having multiple taxpayers come to tax administrations, tax officials can hold the seminar either in the premise of a participating company or in a local municipal facility.

Webinars are often used to broaden the audience and to reduce costs for tax administrations and taxpayers, as they help keep logistics minimal. One additional benefit of webinars is that they can be recorded and replayed later, allowing the creation of a library of webinars covering all major areas of taxation.

Individuals may greatly benefit from education programmes. However, the individuals tax administrations face are not standard and programmes have to be tailored to the specific audience they wish to target.

Tax administrations do not always directly manage those programmes. Some are run with the help of civil society organisations acting as a proxy for tax administrations. Instead of directly assisting taxpayers, tax administrations train the members of organisations that are already well established and recognised in the country, which can in turn educate individuals that tax administrations would not have been able to reach otherwise.

Other education programmes indirectly benefit individuals. This includes, for instance, the parents of pupils who explain what they learnt at school about how paying taxes helps to build a fairer society or the person attending seminars about business and taxes. This may be the reason why education initiatives are less often directed toward individuals (6 countries have programmes targeting individuals, 11 targeting businesses and 27 targeting youth).

It is also important for individuals to be aware of the existence of education programmes if they are to engage with them. This issue, shared by all kinds of programmes and by tax administrations in general, is so important that many tax administrations are actively raising awareness about taxes and tax systems.

Information campaigns are widely used; in fact, they are the second most used means of educating taxpayers; 23 of the 59 surveyed administrations reported using them. It is worth noting that in a few countries (3), information campaigns are the only means of taxpayer education (even if some run several of them).

Information campaigns are a good means of increasing taxpayers’ sense of belonging to the community. Tax administrations are accountable to citizens through their representatives in parliaments, but in practice it is important to demonstrate this accountability in a more direct way. This implies demonstrating how taxes are spent to benefit the whole community.

Building a sense of belonging through tax also necessitates taxpayers not only knowing their obligations, but also their rights. Tax administrations can help with this through information campaigns, publications or social media.

Providing taxpayers with basic information may be helpful for some, but in the era of rich content, information campaigns have gone beyond simply informing taxpayers. They put information in context, explain it, simplify it, synthesize it and allow taxpayers to appropriate it. The choice of media used to reach out to taxpayers is essential as different media have characteristics which may be more suitable to one kind of message or another. What makes information campaigns so popular amongst tax administrations is their ability to reach the entire population of a country, or at least most of it, including people living in remote areas. It is particularly suitable for initiatives tackling the informal sector, focusing on customers and on changing their behaviour. Asking for a receipt may seem nothing to most people, but it may make a huge difference nationwide; information campaigns are great to explain how a simple gesture can make societies better.

Covering or targeting the right audience is a first step but designing a message that is understandable and that can change people’s minds remains a difficult task. Ensuring that a message is user friendly makes it easier to be shared and accepted. Another way to ensure that messages have a significant impact on a category of taxpayers is to work with them, either gathering information through other taxpayer education initiatives (during events or using more scientific methods) or by exposing a few members of the target audience to the message and gathering their feedback to improve it.

Tax days, fairs and other events are great means of building a more positive relationship with taxpayers. They commonly take place during a limited period, from a day up to a week. They can comprise several activities taking place at different locations throughout the country. Their main strength is that they create a space where taxpayers and tax officials can meet. This can be done around activities for kids or with stands set up for the occasion. This can also give the opportunity to thank taxpayers by awarding the best taxpayers of the year.

Such events, and especially tax days or tax weeks, can be part of a broader political agenda to strengthen citizenship; in this case, high officials from the government may be involved, sending a powerful message to the country. These events are often supported by a strong narratives going beyond taxation, for instance linking paying taxes with freeing the country from foreign aid (Luttmer and Singhal, 2014[1]) or strengthening the country, as in Côte d’Ivoire; or even gathering the country around a common goal, as in Guatemala. Even when this is not the case, however, it is possible to associate celebrities with the event to drastically improve its visibility and to build on the reputation of that person.

However, organising such events can be costly and challenging for tax administrations and some of them prefer to be part of events already organised in the country. These are places where many people already go for other reasons than to get information on taxes, and where it is possible to start a fruitful discussion with them.

Other media can also be used by tax administrations to get in touch with taxpayers in their daily life. Especially in Africa, some tax administrations have institutionalised short regular broadcasts aired just before the evening news. These broadcasts deal with a different subject each time and are generally proposed by an official of the tax administration. They are a good way to promote tax citizenship, inform taxpayers and shed light on the women and men working in tax administrations. They are also a good way to make sure taxpayers are aware of their rights and obligations, as this is the foundation of tax compliance and citizenship.

Another fun way to engage with young people is to take advantage of existing entertainment technologies, such as videos or apps. Many countries use them in an effective way, for instance producing games or music videos.

While mass media are extremely useful for reaching wide audiences, specific groups of taxpayers sometimes need more tailored messages.

Tax administrations are eager to work with researchers and scholars to better understand the needs and behaviours of taxpayers. The relationship is beneficial for both parties, as tax administrations benefit from the knowledge produced and methods of analysis deployed, while in return, researchers benefit from the already identified topics of interest and the large amount of information available to understand them. For instance, tax administrations send letters or emails to taxpayers (individuals or businesses) that have not paid their taxes on time and researchers can help understand what message would be the most efficient to convince them to pay.

Researchers can rely on proven methods to produce reliable results. They can do quantitative statistical research, such as that mentioned above, but they can also do more qualitative analysis based on ethnographic methods. In both cases, the goals remain the same: understanding taxpayers. This new knowledge can be used to offer a better service or to improve communication.

Small businesses and individuals may greatly benefit from the assistance of tax administrations in filing their income tax returns. By doing so, tax administrations do not only assist the individuals receiving the help, but also the whole country as this greatly increases the level of compliance. When tax administrations offer such a service to taxpayers in specific locations, they can do so through their regular offices but also by opening temporary service points. This is of major importance, especially for reaching taxpayers located far from regular offices or facing difficulties in reaching the locations (either because they must run their business or because of a lack of affordable transport). Another efficient way to offer the service to those who need it the most is to use mobile units such as the ones used in South Africa. Those are moving offices that can be deployed where they can be the most useful. For those units to be as efficient as possible, it is important that taxpayers be aware of their temporary location. Having many of them allows for greater visibility and efficiency, but this is an investment that not all tax administrations can make.

As already mentioned above, civil organisations, like business-related associations or others, can be very efficient in reaching taxpayers. Their members need to be appropriately trained to become tax administrations spokespersons. They have the advantage of knowing specific groups of taxpayers and speaking the same “language”.

While many tax tools and services can make compliance easier, for some taxpayers assistance may be required to enable them to effectively use such tools and services. The objective of these initiatives is not to undertake specific tasks for or with taxpayers, but to train them to use tools or services specially designed to ease their life. Such tools can be as simple as a pre-filled tax return or as complex as a fully online platform covering the whole range of declarations and services taxpayers may need. Such initiatives may be a complement to other initiatives; while one may communicate the existence of such tools and services, raising awareness, a more practical assistance-focussed initiative can support those who are identified as needing more hands-on help.

E-services are the focus of many initiatives in this category. Many countries have introduced e-services in recent years, and even if the scope of the reforms may differ, they all aim at simplifying the filing process and offering easily accessible services. These projects are ambitious and often integrated within a broader vision of the country.

Providing taxpayers with a single, secure access point is one of the most common tools implemented in recent years. Such access points help simplify the relationship between taxpayers and tax administrations by grouping available services together. This approach also helps in reducing costs for tax administrations (as there tend to be fewer errors) and for taxpayers (as online forms are designed to be easier than paper forms).

Once new tools are developed, it is necessary to advertise them and train taxpayers to use them. This is often the subject of a wide communication plan using all other means of taxpayer education, like information campaigns, direct communication to taxpayers (through events, emailing, phone calls, etc.), the production of leaflets and training programmes.

The assistance takes different forms depending on the tool. For instance, when the new tool is an online pre-filled tax return, an information campaign explaining that most taxpayers can complete their return in a few clicks may prove efficient. However, when the tool is complex or is the first of its kind among the administrations of a country, a more ambitious plan may be needed, for instance with an online video explaining the different steps and options offered by the new tool.

Only half (72/140) of the initiatives were subject to any form of evaluation and only 25 (18%) were subject to external evaluation. The limited level of evaluations across the initiatives makes it difficult to draw many conclusions, apart from highlighting the need to invest further in evaluations. For teaching initiatives, 56% were evaluated, which is more than awareness-raising initiatives (47%) or assistance initiatives (40%). External evaluations were not evenly distributed among the categories: no assistance initiative benefited from such evaluation, while 19% of teaching initiatives and 22% of awareness-raising initiatives did.

Where evaluations did take place, many appear to have looked at short-term impacts. Where details of evaluations were provided, these tend to be surveys/questionnaires of the participants assessing the quality of the teaching/communication materials. As a result, there is very limited data from formal evaluations on the long-term impacts of taxpayer education initiatives on taxpayer behaviour. While such assessments are inevitably difficult to undertake, this research gap needs to be addressed.

Respondents were asked to provide their own estimates of the impact of the initiatives in several key areas. Given that most initiatives have not been evaluated, and none appear to have been evaluated on all the aspects covered by the impact’s questions, the responses here are clearly only perceptions. Nevertheless, they may provide a useful indication of where taxpayer education programmes are perceived to be having the most impact.

The teaching initiatives were perceived to have the greatest impact on tax morale. Among respondents, 90% perceived teaching tax initiatives to have a great or very large impact on increasing “people’s sense of moral obligation to pay taxes ‘voluntarily’” (i.e., tax morale), compared to 76% for awareness raising and 75% for tax assistance.

The assistance initiatives were perceived to have the biggest impact on taxpayer knowledge. While all categories of initiatives were perceived as having a great or very large impact on increased taxpayer knowledge (between 78 and 85%), there is a great discrepancy in the top rating of “very large increase”; 52% of respondents saw the assistance initiatives as having a very large impact on increased knowledge compared to 27% and 33% for awareness raising and teaching, respectively.

Awareness-raising initiatives were estimated to have the least impact on participants’ perceptions that “the government spends their tax money wisely”; 12% responded that awareness-raising initiatives had no impact on the belief that governments spend their tax money wisely; a further 40% estimated only a small impact, for a total of 52% seeing no or little impact. This compares to 44% and 33% of respondents who consider assistance to taxpayers and tax teaching initiatives, respectively, have no or little impact.

Awareness-raising initiatives were also perceived to have the least impact on perceptions that “other taxpayers are paying their fair share”: 52% of respondents saw these initiatives as having little or no impact on perceptions that other taxpayers were paying their fair share, compared to 37% for tax teaching initiatives and 21% for taxpayer assistance initiatives. Interestingly, the taxpayer assistance initiatives had the highest share of perceptions with relation to both having a very large impact (21%) and no impact at all (14%).

The present report gathers information on 140 initiatives from 59 countries, grouped under three main categories (teaching taxpayers, communicating tax and assisting taxpayers) and eight sub-categories. These divisions are designed to help policymakers and tax administration officials easily find initiatives that are relevant to achieving their goals in terms of taxpayer education, as well as practical advice on implementing them. The following chapters will describe each initiative type, with an analysis of objectives, policy options, suggestions from tax administrations concerning implementation, and observed and potential impacts.

Chapter 3 presents initiatives focussed on teaching essential elements of the tax system. Their aim is to strengthen tax culture, build a culture of voluntary compliance, explain the benefits of paying taxes and – in general – increase tax morale. The subcategories of initiatives are divided by target: future taxpayers (i.e., primary, secondary, and university students – sec. 3.1); businesses (both SMEs and big companies – sec. 3.2); and individual taxpayers (with a special focus on activities reaching out to lower middle-income taxpayers, taxpayers living in rural areas, etc. – sec. 3.3).

Chapter 4 is devoted to initiatives to communicate tax, raise awareness and inform people regarding tax and the tax system. The information provided through these initiatives – although still aiming indirectly at raising tax morale and culture – has more narrow and direct objectives. Specific information campaigns (sec. 4.1) can aim at: giving particular information to some segments of taxpayers to increase their knowledge of the tax system and of tax rights and obligations (e.g. explaining tax obligations to new entrepreneurs and foreigners, guides for property owners, information for auditors, etc.); increasing compliance (e.g. organising receipt lotteries to motivate taxpayers to check receipts, publishing documents and distributing them to specific audiences, conducting awareness campaigns, etc.); providing information and updates on the tax system and new tax laws (e.g. via social networks, call centres, and TV and radio programmes). For many tax administrations, however, it is also essential to build a strong and positive relationship with taxpayers (sec. 4.2) through tax events and fairs like National Taxpayer Days as well as through regular TV shows or games. Section 4.3 is dedicated to highlighting the importance of tailored communication for reaching specific groups of taxpayers. Some tax administrations are in the process of improving such communications using scientific methods (like behavioural insights and ethnographic research) to better understand audiences and be more effective.

Chapter 5 discusses assistance initiatives aimed at easing the life of taxpayers, namely through the use of new tools and services (e.g., e-services such as e-filing, web portals, new tax laws, etc. – sec. 5.1) and assistance in filing returns (sec. 5.2). These constitute a more practical type of taxpayer education.

Chapter 6 focuses on non-tax administration actors such as NGOs. Finally, Chapter 7 concludes with the lessons learnt and provides suggestions and recommendations for increasing the success of taxpayer education initiatives.

The Annex A summarises all the initiatives for which tax administrations gave details during the initial survey round.

References

[1] Luttmer, E. and M. Singhal (2014), “Tax morale”, Journal of Economic Perspectives, Vol. 28/4, pp. 149-168, http://dx.doi.org/10.1257/jep.28.4.149.

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