Engendering Compliance: Evaluating and Improving a Randomized Tax Holiday Policy

We study a unique randomized policy innovation in Montevideo, Uruguay, in which the municipal government raffles tax holidays to eligible taxpayers. Using access to over-time tax payment records and our own survey data, we will assess the impact of holidays on subsequent tax compliance, as well as citizens’ attitudes towards taxation and governance. We will also use an experimental intervention to study the effects of informing non-winners about the existence of the lottery—which has not been effectively advertised by the government—allowing us to estimate multiplier and spillover effects of the program at full scale.