Compliance and Receipt Lotteries

Abstract

Abstract The tax gap — the difference between taxes owed and taxes paid — measures the extent of tax evasion. Lacking tax compliance reduces tax revenue in many countries, especially from value-added taxes. As a countermeasure, Germany recently introduced mandatory cash registers and obligatory receipts. At the same time, other countries use receipt lotteries. This article discusses how such lotteries can be designed to generate a positive effect on tax morale with the help of modern technologies. The underlying concept was developed by students from the German Business Faculty in Hong Kong for the Young Economic Summit (YES!) school competition.