The effects of mass media campaigns on individual attitudes towards tax compliance; quasi-experimental evidence from survey data in Pakistan

Abstract

Pakistan has consistently performed low on taxation, with revenue collection hovering around 10% of GDP. Tax reforms have been attempted but without significant gains in revenue collection. Due to the recalcitrance of tax revenues, the tax authority attempted to enlist voluntary compliance, as one of the avenues for its efforts to increase collections. This paper examines the effectiveness of mass media campaigns in the TV and national newspapers used by the Federal Board of Revenue (FBR) of Pakistan to increase awareness, tax filing, and, ultimately, tax morale. We use survey data that were collected in 2014 immediately after these mass media campaigns by the FBR. Using coarsened exact matching, we construct treatment and control groups that are nearly identical in terms of pretreatment balance of demographic and behavioral predictors of high tax morale. We find improved perceptions towards tax compliance in Pakistan for respondents exposed to the TV and newspaper advertisements. The choice of the advertisement's delivery device is important since the latter is more effective. Our findings provide empirical evidence that well-timed mass media campaigns can enhance voluntary tax compliance.