The effects of information framing on people’s behavior in tax evasion

Abstract

This paper aims to study the information framing effect on people’s behavior in tax evasion. Data was utilized with the help of an on-line survey experiment with 3 treatment groups: “Positive Information Framing”, “Negative Information Framing” and “No Information Framing”. Results yielded no significant difference of declared income amounts between treatment groups, so the information about forgone public goods as a result of tax non-compliance and information about public good provision as a result of tax compliance had no significant effect on people’s behavior in tax evasion. The reason behind this outcome was people’s trust towards Armenian government. As taxes are the main source of governmental revenue, in order to enhance tax compliance government authorities should focus on increasing taxpayers’ trust.