This publication is a deliverable under a Technical Support Instrument (TSI) project funded by SG-REFORM providing technical support to the revenue administrations of Austria, Belgium and Portugal for strengthening tax compliance by implementation of tools and technics based on behavioural insights. Behavioural science focuses on human behaviour and decision-making processes. In the context of tax compliance, it can be used to support policy interventions and the capacity of tax administrations, contributing to institutional, administrative, and growth-sustaining structural reforms.

Understanding the complexities of human decision making has profound implications for tax compliance. Governments globally are adopting this approach to improve their services by simplifying information or changing the so called “choice architecture” faced by individuals making a decision. The ‘architecture’ refers to the way that a choice is presented to decision makers such as the taxpayers (e.g., whether or not tax returns utilise default options). Drawing on evidence from applications of BI in the area of tax compliance worldwide, this handbook explores how understanding human behaviour within its social context can offer innovative, cost-effective solutions to challenges in tax filing, payment, and accuracy.

This handbook aims to:

• Provide authorities and policymakers with a process which can be used to develop, test and implement behavioural interventions that improve tax compliance.
• Unpack the diversity of drivers of non-compliance in the context of taxation which have been identified in previous studies. This overview of drivers can be used as a starting point for authorities and policymakers to brainstorm about what drivers are relevant for the non-compliance issue(s) in their own countries. This identification is necessary before moving on to designing tailored measures. Furthermore, the handbook will provide an overview of previously tested behaviourally informed interventions by describing the mechanisms which were at their core. This overview is also expected to inspire users of this handbook when designing their interventions in their own countries.
• To help select the most appropriate research designs for each of the different stages involved in developing and evaluating measures using behavioural insights.