Context

Non-compliance in paying taxes affects public revenues, trust in governments and perceived levels of fairness. A sizeable amount of unpaid taxes in all Member States is due to lack of voluntary compliance by a significant number of taxpayers liable to pay relatively small amounts of taxes. However, the recovery from those non-compliant debtors creates a high administrative burden for revenue administrations, since it is time- and resource-intensive. To increase rates of voluntary compliance for these taxpayers, some revenue administrations have run behavioural insights (BI)-inspired pilot projects, and have begun to build more expertise in this field.

The Directorate-General for Structural Reform Support (DG REFORM) provides support for the preparation and implementation of growth-enhancing administrative and structural reforms by mobilising EU funds and technical expertise. Austria, Belgium and Portugal have requested support from DG REFORM through its Technical Support Instrument (TSI)  to strengthen tax compliance by implementing behavioural insights. The main service provider for this project has been selected as a result of a call for tenders.

The JRC, and specifically the CCBI, will help build capacity, contribute to the horizontal coordination (across the TSI projects on BI for the different MSs and within EC services) and provide technical inputs and knowledge on BI to the main service provider and to DG REFORM.

Goals

The project aims at achieving the following specific objectives:

• To identify relevant BI interventions for each country, based on analyses of their respective current situation, and considering international best practices.
• To improve the knowledge and capacities of the tax authorities to implement BI interventions for strengthening tax compliance.
• To implement BI interventions as a pilot, in order to test them in practice and improve the approach based on BI.
• To increase awareness among key stakeholders and the public of BI tools and of the results derived from their use.
• To implement a digital dashboard for monitoring the behaviour of different segments of taxpayers and reinforce a customer-oriented approach.

Methods

The project includes, among other, training for capacity building, literature review, quantitative and qualitative analysis of the current situation in the Member States, and field trials for specific behavioural interventions tailored to the needs of the Member States.

Expected outcomes

The expected outcomes of the project are implemented BI approaches and tools for the revenue administrations of Austria, Belgium and Portugal for debt collection, and on-time and correct payments and declarations.

Publications

Methodological Handbook: Strengthening tax compliance by implementing behavioural insights for revenue administration in Belgium, Austria, and Portugal

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.

 

See the full publication

Other resources

EU Policy Lab blog post (09 April 2025): Making tax compliance easier: How to help taxpayers help you (if you’re a tax administration)