7. Conclusion: Designing taxpayer education initiatives

Taxpayer education is a means to building tax culture, compliance and citizenship. It is not only about encouraging people to pay taxes, but also about explaining taxation and its place in society as a whole. Citizens, whether taxpayers or not, benefit from understanding the effects of paying or not paying taxes, both on their daily life and on that of their country. They also benefit from practical knowledge or assistance, for instance on how to actually fill their tax returns. By increasing tax literacy and tax morale, taxpayer education also results in taxpayers being more likely to help tax administrations fight tax evasion and tax fraud.

Taxpayer education is a long-term strategy whose main aim is to build a culture of voluntary compliance, an aim that cannot be achieved in the short term. While some aspects of taxpayer education may show short-term impacts, the ultimate objective is almost always to establish long-term behaviours. Taxpayer education initiatives should therefore not be seen as one-off, short-term measures, but rather as part of a continuing effort by the public authorities to positively influence taxpayers’ perceptions. At its fullest, a comprehensive taxpayer education strategy should be aimed both at current taxpayers – both companies and individuals, to fill the knowledge and information gaps they may have on tax – and at future taxpayers, so as to create favourable conditions by helping them understand that tax is the basis of a cohesive society. Moreover, educational initiatives should ideally encompass the three domains analysed in this report – teaching, raising awareness and assisting – to ensure that taxpayers are educated, informed and capable of complying.

Every country has its own needs and resources, but all countries can benefit from taxpayer education initiatives. Whether tax administrations have significant resources or not, whether they have long experience in educating taxpayers or not, whether taxpayers have extensive existing tax knowledge or not, there is scope to find and implement initiatives that fit their needs. Because the population, economy, and tax system are constantly evolving, there will always be a benefit from investing in taxpayer education initiatives. They can offer alternatives to more coercive means of increasing compliance, and also bring other benefits, such as improvement in the image of the tax administration.

Taxpayer education initiatives come in many different forms. As the survey shows, there is a huge variety of initiatives. They range from teaching tax to pupils to TV broadcasts, tax fairs and webinars; but all, as outlined in Chapter 1, aim at achieving the same goal: to "transform the relationship among taxpayers, tax systems and tax administrations and to mutually benefit them and society as a whole.”

Countries combine initiatives in different ways to create their taxpayer education programmes. Some adopt a variety of strategies to educate taxpayers while others appear to focus on specific approaches. Again, there is no right approach, except what matches the countries’ needs. Nonetheless, all countries should consider how they can maximise the collective impact of their initiatives, establishing structures to enable information and ideas to be shared across those working on the different initiatives. The table in Annex A offers an indication of the way programmes are structured, although it is important to remember that tax administrations were only asked to report on the most significant three initiatives, even though they may, as is often the case, run many of them.

Tax administrations can also play a role in shaping a country’s tax culture. This is, in part the aim of this report: to show the possible approaches existing to allow decision makers to enrich the variety of measures adopted to educate taxpayers. Adopting multiple and complementary strategies – without losing the country-specific approach – is indeed the most effective way to educate taxpayers and to make them knowledgeable and skilled on tax. In this vein, getting inspiration from comparative examples of initiatives can only help. 

In this report, we have explored the options adopted by some tax administrations in their endeavour to increase taxpayers’ tax literacy and their understanding of tax matters, as well as to assist them. Our study is not exhaustive by any means; it includes, nonetheless, data from 59 countries with different levels of development (Figure 2.2), different economies and a covering large geographical area in the world.

This report also takes place at a very particular moment. The questionnaires were sent and answers received before the Covid-19 pandemic, while the report is published during the pandemic. The most important effect of the pandemic has been to accelerate the movement of tax administrations online. It is not a new phenomenon, but the limiting of face-to-face opportunities have rendered it even more pressing (Box 7.1).

Analysing 140 initiatives from 59 countries, it has been possible to identify several key considerations to help administrations looking to design and implement taxpayer education initiatives or improve existing ones. Once the type of initiative has been decided following the stepwise approach proposed in Chapter 1 – defining a goal, checking the available resources and identifying potential initiatives – careful consideration should be given to the design. This process may involve contacting tax administrations already running similar initiatives, as well as discussions within the tax administration and with relevant stakeholder and potential partners to ensure support for the future initiative. Based on the information provided in this report, there are several issues to bear in mind in the design of taxpayer initiatives which are common to all types: first, it is essential to ensure that the chosen initiative fits local needs and circumstances; and second, it is important to carefully craft every aspect of the initiative.

There is no one initiative that fits all needs and situations, and tax administration have to adapt to the specific context of their country when designing new initiatives. They need to carefully analyse the relevant characteristics of their own society and those of any targeted groups. These characteristics can include the age of the group’s members, their level of education, their access to resources, their needs, the legal framework in place, etc.

Initiatives focused on specific groups of taxpayers are frequent. This may improve their efficiency but also requires fine-tuning to take into account the characteristics of those groups. Even so, some individuals may be more responsive to some types of initiatives than others: for example, some will only require awareness campaigns while others will need the greater level of support provided by assistance initiatives; some will have very little knowledge about tax while others will understand the topic well.

This report can assist designers of taxpayer education initiatives by showing them what is done in other countries, but they should not try to import an initiative without adapting it to the realities of their country. This is essential if these initiatives are to be successful, as they must be understood and accepted by those for whom they are designed.

The evidence from our survey is that taxpayer education initiatives are unlikely to exist in isolation, most countries have several initiatives running. New initiatives are therefore likely to take place in an environment where other taxpayer education initiatives are already running, and others may be being planned elsewhere in the tax administration.

Avoiding duplication is of tremendous importance, as resources are scarce. A well-defined goal will help on that point but only as far as designers are actually reviewing existing initiatives and reflecting on whether existing initiatives can be expanded, or incorporate new aspects, or whether a new approach is needed.

Finding synergies between initiatives – in terms of content or of organisation – can increase efficiency. One single initiative can combine aspects from different categories to offer a rich experience to taxpayers and future taxpayers. For instance, the Núcleos de Apoyo Contable y Fiscal (NAF - see Box 7.2) imply tax administrations and university to ally to teach tax to students who will, in turn, assist low-income taxpayers.

Choosing the right partners can be crucial to the success of an initiative. There is not a predefined set of partners that must be chosen, these vary depending on the type of initiative, the targets audiences that aim to be reached, and the skills and resources needed to complement those of the tax administration. The most common types of partners that ally with tax administrations to educate taxpayers are other public institutions, like Ministries or Agencies. For instance, Ministries of Education are often essential partners for implementing an initiative involving teaching at schools or universities.

Tax administrations should not limit their search for partners within the public sector but include non-governmental actors too. Civil society organisations can be useful to reach out to specific categories of taxpayers and can support communications and visibility. Academics, as we have seen in Chapter 4, may assist in designing, leading and/or evaluating the initiative. The private sector is much more rarely involved in taxpayer education initiatives, but so long as conflicts of interest can be managed, in some cases there may be scope for effective partnerships with the private sector. In some cases, partnerships may be sought with specific individuals, high-ranked officials of the country, like Ministers, or celebrities, who may help support taxpayer education initiatives. 

Most initiatives will require good co-ordination among, and management of, the range of actors involved (different services of tax administrations, partners, funders, etc.) Identifying the right initiative and designing it effectively are only the starting points. Because most initiatives are designed to run over a long time, effective ongoing management is vital.

Ensuring the resources needed are available to manage the initiatives over time is, therefore, important. Most initiatives will need to evolve in response to feedback, as the tax code is updated, or as school curriculums change. It may also be important to maintain the personal relationships among the various actors involved in an initiative. Managing a single initiative or a portfolio of them requires that someone, a person or a service, be in charge. As different tax administrations are structured in different ways, the best approach is one that is tailored to the organisational structure in the country. Several of the tax administrations responding to the survey indicated that all taxpayer education initiatives were managed centrally by a dedicated taxpayer education or communications team; such an approach can create efficiencies in management resourcing, as well as facilitating co-ordination across initiatives.

Taxpayer education initiatives have many aspects whose relative importance may vary depending on the goal set, local needs and circumstances, and the nature of the initiative. Based on the lessons learnt from all the countries, this section aims at helping designers identify key aspects they may need to focus on.

The risk when implementing an initiative to educate taxpayers is that of only reaching certain segments of the population – usually the ones who are already interested in tax matters. This is the case for many of the initiatives that rely on online communication – such as information on websites and social networks, webinars, etc. – but also applies to seminars and workshops that require pre-registration. These types of initiatives may not attract people who are not previously interested – and in part knowledgeable about – the issues at stake.

Many of the taxpayers who belong to the most vulnerable categories are, however, less likely to proactively seek interaction with tax administrations, and may also lack access to digital means of communication. Even if the content of a taxpayer education initiative is of the highest quality, if that initiative does not reach its target audience, its effectiveness is likely to be extremely limited.

It is, therefore, important for the administration to carefully consider how to reach out to as much of the target audience as possible, paying particular attention to those with whom they usually have less contact. Partnerships can be vital in achieving this. If done well, those reached by the initiative will not only have the opportunity to learn about tax and filing procedures, but they may also gradually change their perception of the tax administration, which is especially important when those perceptions are characterised by fear of the tax administration.

While some initiatives aim at immediate effects, others seek to produce them over time. Information campaigns deployed when taxpayers are required to fill their income statement have a short implementation period and are primarily intended to produce their effects only once. They may be repeated every year, but as soon as they stop, most of their effects stop too. Such initiatives can stop and start with only short-term consequences. At the opposite end of the spectrum, teaching taxes to students has a much longer implementation period and needs to run continuously over many years to have an effect; their effect is expected to last longer, many years after students have left schools and university and ideally over their whole lifetime.

It is therefore important to identify the timescale relevant to the objective of the initiative, and to design it accordingly. The timescale will affect key aspects of the design, including the resources needed, the monitoring and evaluation processes, and the way in which the initiative is to be managed. Consideration should also be given to identifying complementarities and/or dependencies between short and long-term initiatives, for example. The impact of behavioural-economics nudge approaches may weaken with repeated use, and therefore these could be complemented by initiatives influencing longer-term behavioural change.

It is also necessary to consider the timing for the delivery of activities. In many cases, this will be fairly obvious, linked to filing deadlines. There may be other relevant considerations, however, when teaching tax to students, especially when tax is not part of the assessed curriculum. Some administrations highlighted the importance of avoiding the examination period in schools, when both teachers and students are less willing to focus on topics that will not feature in the exams.

The availability of resources, especially long-term funding, is a challenge for most taxpayer education initiatives. When designing the initiative, it is important to be realistic about what will be possible with the available resources. It may be necessary to reduce the scale and/or ambition of an initiative if sufficient resources are not available.

Some initiatives are more resource-intensive than others. Taxpayer education initiatives have different costs (in terms of the financial, logistical and human resources needed). The availability of resources may, therefore, be a factor in deciding which types of initiatives are viable, or in determining the delivery mechanism for an initiative. For example, online communications are likely to be much cheaper than running a Tax Day, with activities taking place all around the country.

Consideration should be given to how resourcing needs may change over time. Some activities are short-term (e.g., specific campaigns) and are not threatened by uncertainty over future funding; others require a long-term commitment (e.g., integrating tax into the school curriculum) and therefore call for more certainty over future funding. The fact that only one initiative from the 2015 report is no longer running suggests that even initiatives with short-term goals are likely to prove useful over a longer period; for this reason, planning should consider longer-term funding from the start. For initiatives with the potential to scale up (e.g., teaching-tax-in-schools initiatives, many of which start small with a few schools and scale up), planning for changing resourcing needs should be incorporated into the design, where possible.

Partners can often bring complementary resources. Finding the right partners can help address resourcing challenges. For instance, a regular TV broadcast may necessitate financial resources to pay the channel for the time on air, but if that specific channel is a partner this may not be the case. No partner, however, will be able to replace the need for sufficient resources to be available within the tax administration, to ensure the quality and consistency of the technical content (e.g., the quality of the messages on TV broadcasts). As such, there is a need to ensure that at least the minimum resourcing is available within the administration.

Donors should be involved more extensively in taxpayer education initiatives, as they represent a key means of reinforcing state capacities in many developing countries; this is clearly demonstrated by this report. Some donors already contribute directly or indirectly to taxpayer education. Many of them are institutional donors, such as the African Development Bank. Others are private donors: for instance the OSIWA, which supported Sierra Leone’s NRA in financing tax education activities nationwide; or the Bill and Melinda Gates Foundation, which works in co-operation with the ICTD to test and evaluate experiments in tax education – among others – in Africa. 

The absence of rigorous and systematic impact evaluation of taxpayer education initiatives is recognised as a challenge in many countries (Mascagni and Santoro, 2018[2]). Our study confirmed this, showing that less than one initiative out of five is externally reviewed and only one initiative out of two is reviewed at all. It is important to assess initiatives not only to evaluate their effectiveness, but also to understand their advantages and drawbacks, to improve them and to value their contributions.

Some examples of evaluations demonstrate that it is both possible and valuable for tax administrations to engage in such an activity. The Italian Agenzia delle Entrate, for instance, used social media analytics to measure the degree of exposure, engagement, influence and perception of its online campaigns on pre-filled returns, conducted via Facebook, Twitter and YouTube. This implied considering the number of followers, re-tweets, shares, re-posts and views of the videos, as well as the number of likes and of positive, neutral, or negative comments. Surveys are another way to test the efficacy and success of taxpayer education initiatives. These are particularly effective in indicating taxpayer satisfaction concerning the initiatives and can be useful in obtaining feedback on them. Moreover, some tax administrations implement questionnaires to test the knowledge acquired by the targeted taxpayers after a seminar or class on tax matters. 

Research is not only useful after, but also before implementing an initiative. Surveying taxpayers and obtaining data on the state of their tax knowledge and skills helps to highlight key risk sectors and enable concentrating efforts on them and on better understanding citizens’ needs. This is well demonstrated by the case of the United States’ LB&I approach (Box 7.3). 

Research and impact evaluations are usually conducted either by a dedicated unit of the tax administration – as is the case of South Africa’s SARS Research and Segmentation Division or the Revenue’s statistics and Economic Research Branch in Ireland – or they are outsourced to external agencies. The latter can include government bodies, such as branches of the Ministry of Finance or the National Bureau for Advertising in Israel; higher education institutions, such as the ENSEA (Ecole Nationale d'Economie et de Statistiques Appliquées) in Côte d’Ivoire; or external consultants and accountants, as in Tanzania, Togo and Sweden. 

Academics and researchers can be precious allies in this process. The application of powerful statistical and experimental methods offer an opportunity for tax administrations to succeed in their goals. As highlighted in Section 4.3, this has on more than one occasion proved key. 

Taxpayer education initiatives can play a vital role in contributing to improved tax morale and voluntary compliance, and this contribution can be maximised by careful planning and design. The countries contributing to this report clearly value taxpayer education initiatives, and have also provided valuable insights and lessons learnt that can help others design and implement their own initiatives. Based on this data, Table 7.1 below outlines the key questions that should be asked in planning taxpayer education initiatives to ensure that key challenges are identified up front, as well as the ways in which this report can help in inspiring and refining the planning process.

While this report focusses on the challenges of planning and designing taxpayer education initiatives for tax administrations, there is a need for a broader, global, conversation on taxpayer education. Taxpayer education initiatives do not exist in isolation. As this report has shown, they are part of a wide range of initiatives around the world, with the potential for greater exchange of knowledge and best practices, as well as regional co-operation. They also exist within the domestic tax policy framework, as well as alongside other efforts to improve compliance. In addition, in many developing countries there are significant development co-operation projects that support domestic resource mobilisation. The full potential of taxpayer education will only be realised when it is integrated into this wider ecosystem.

The OECD will seek to facilitate and support further exchange of knowledge and best practices, encouraging others to do so as well. As part of the dissemination of this report, the OECD will seek opportunities to bring together those involved in the development and implementation of taxpayer education initiatives.

Within countries, more efforts may be needed to facilitate feedback between taxpayer education initiatives and tax policy and compliance measures. Taxpayer education initiatives are likely to struggle when the underlying policy and/or compliance measures are suboptimal. Where there are effective feedback mechanisms, both within the initiative and among the relevant policymakers, taxpayer education initiatives can play a valuable role in helping identify issues with broader policy and compliance concerns, especially any unforeseen and practical implementation challenges. Several of the initiatives profiled in this report have such feedback loops integrated into their design, but these practices can become more widespread.

Development co-operation can provide further support for taxpayer education. It is a long-standing recommendation that donor-funded tax programmes should, if possible, incorporate programmes for public information, tax education and public-private dialogue (OECD, 2013[1]). There does not appear to have been much progress, however, outside of the NAF programmes. Only three initiatives in developing countries refer to support from development partners (either bilateral or multilateral); several more highlight the role of regional tax organisations as regional development partners. This suggests there is significant scope for development partners to increase the support they provide for taxpayer education, both by increasing financial resources and by sharing expertise. Such support should not just be limited to tax administrations; as noted in Chapter 6 non-governmental actors have a clear role to play and are not yet fulfilling their potential.

References

[1] OECD (2013), Tax and Development: Aid Modalities for Strengthening Tax Systems, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264177581-en.

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