Denis Mukama, Head of Research, Rwanda Revenue Authority (RRA); Giulia Mascagni, Fellow, Institute of Development Studies (IDS) and Research Director, ICTD; and Fabrizio Santoro, ICTD Research Officer

1. Evaluation of RRA’s taxpayer
education program
Giulia Mascagni (ICTD), Denis Mukama (RRA), Fabrizio Santoro (ICTD)
ICTD Annual Meeting
Entebbe, 17th October 2017

2. Outline of presentation
1. Overview of project
2. Phase 1: initial results
3. Phase 2: next steps

3. 1. Overview of project

4. Overview of the project
• Genesis
- Improving voluntary compliance with limited resources – call for internal assessment
- TADAT assessment and emphasis on evaluation of compliance initiatives
- Institutional focus on internal data consumption (Data analytics)
• Main challenges
- Quick solutions to tax admin challenges Vs longer term research
- No data (linkage of training to declaration, reasons for non attendance)
- Capacity to undertake program evaluation
• Involvement of ICTD
- Previous work on compliance projects – revenue benefit
- Experience in experimental research (balance btn long term and quick wins, capacity
building opportunities)

5. Overall objectives
1. Reach: attendance rates and self selection
2. Effectiveness of RRA’s taxpayer education program
3. Collect taxpayer feedback on the program
4. Improve data on attendance
5. Pilot ways to improve RRA’s education program

6. RRA’s taxpayer education program
• All newly registered taxpayers are invited
• Invitations by SMS, calls, letters to PSF and district offices
• RRA staff delivers the training
• Contents: basic info on the tax system
• Trainings mostly held in hotels
• Duration: ½ day with lunch
• About 30 trainings each year, in all districts
• No good data on attendance and no evaluation

7. Two Phases: Phase 1
• Objectives:
• Information about attendance and self selection
• Effectiveness on knowledge and perceptions
• Get TP’s feedback on the training
• Data: attendance data and survey
• Small sample
• New registration process
• Attendance data to allow matching with declarations
• Pilot a new registration process – TIN, business name, participants name (to allow
matching with declarations – phase2)

8. Two Phases: Phase 2
• Objectives:
• Analyse effectiveness on actual compliance
• Pilot a new way to boost attendance (experimental)
• Pilot a new hand-holding program
• Data: attendance and administrative data
• Data from tax declarations
• All new taxpayers
• Attendance data on all trainings (new registration procedure)

9. RRA invites all new
taxpayers to the training
Some taxpayers attend the
training
Effects of the training on:
• Knowledge
• Perceptions
• Compliance behaviour
Some taxpayers do not
attend the training
No expected effects of the
training (except possible
spillovers)
RRA’s list of
new taxpayers
Attendance data,
Survey data
Survey data
Data from returns
Data sources: Analysis:
1. Attendance rates
and self-selection
2. Effectiveness of
RRA education
program
Overview of evaluation

10. Phase 1: Results

11. Data
Survey:
• 1,000 invited taxpayers: both attendees and non-attendees
• 2 rounds: before and after the training
• All new TP, mostly very small businesses
• Modules on demographics, info on business, reasons for registering,
perceptions, knowledge, training / feedback
• 3 districts: 2 rural (Musanze and Rubavu) and 1 urban (Kicukiro)
Attendance data:
• Pre-populated list with TIN, business name
• Add information about participant name, phone number.

12. Baseline: initial results on knowledge
• Low knowledge about tax:
• 37% do not know which tax type they registered for
• Overall average on knowledge index: 6.4 - 34% of right answers
• Knowledge Index out of 19 questions, 1 point for each correct answer
• By gender: male (6.7); female (5.7)
• By education: primary (4.9); university (7.6)
• By tax centre: Kigali (6.6); out of Kigali (6.1)
• By firm size: no other employee (6); above 5 (7.5)

13. Baseline: initial results on perceptions
• Authorities always have a right to make people pay: 85% agree
• Citizens must pay for country to develop: 99.6% agree
• Taxation is a social duty: 98% agrees
• Trust RRA to do their job professionally: 94% agree
• Evaders will be caught: 98% agrees
• Complexity: difficult to file / get in touch with RRA: 60% and 30% agree
• The tax system is fair: 87% agree
• Most businesses evade: 75% agree
• Gifts and unofficial payments: 51% agree
• Right for some people not to pay: 40% agree (if neighbours don’t: 5%
agree)
• High satisfaction with public services (security has the highest score)

14. Attendance rates and self-selection
• How many taxpayers attend?
• Population of new taxpayers: 30% attendance rate
• Kigali: 23%
• Out of Kigali: 40%
• Survey participants: 53% attendance rate
• In Kigali: 51%
• Out of Kigali: 56%
• Self reported and actual attendance are largely consistent
• Who goes to the training? Self-selection
• Differences between attendees and non-attendees are not significant, except:
• Age: attendees are 1.5 years older
• Attendees have slightly higher knowledge (0.3 points)
• No difference in education

15. Effect on taxpayer knowledge
• 86% of attendees see an improvement in the knowledge index
• 52% increase in knowledge from training
• Controls: gender, age, usage of email, bank account, previously trained,
secondary education, above secondary education, Kigali, books, baseline value
Teach to comply? An experimental evaluation of
a taxpayer education program in Rwanda
Giulia Mascagni, Fabrizio santoro
October 15, 2017
Table 1: Training e↵ect on knowledge
(1) (2) (3)
Know di↵ Know gain Know index
Attendance 1.303⇤⇤⇤
0.518⇤⇤⇤
2.569⇤⇤⇤
(0.094) (0.069) (0.155)
controls yes yes yes
N 821 816 821
Table 2: Training e↵ect on perceptions
(1) (2) (3) (4) (5)
file getintouch fair duty evade
selfrep attend -0.077⇤⇤
-0.057⇤⇤
0.011 -0.004 0.007

16. Effect on taxpayer perceptions
• 8% and 6% increase in perceptions about complexity of the tax system
• “it is difficult to file” + “it is difficult to get in touch with RRA”
• Others not significant: tax system is fair, tax is a social duty, evaders will be caught, …
• Controls: gender, age, usage of email, bank account, previously trained, secondary
education, above secondary education, Kigali, books, baseline value
Table 1: Training e↵ect on knowledge
(1) (2) (3)
Know di↵ Know gain Know index
Attendance 1.303⇤⇤⇤
0.518⇤⇤⇤
2.569⇤⇤⇤
(0.094) (0.069) (0.155)
controls yes yes yes
N 821 816 821
Table 2: Training e↵ect on perceptions
(1) (2) (3) (4) (5)
file getintouch fair duty evade
Attendance -0.077⇤⇤
-0.057⇤⇤
0.011 -0.004 0.007
(0.037) (0.029) (0.023) (0.004) (0.006)
controls yes yes yes yes yes
N 793 815 803 819 800

17. Taxpayer feedback on the training
• Duration: 40% say it was too short
• Time for questions: 40% say there was not enough
• 99.8% would recommend the training to other business people
• Training usefulness: average of 4.4 (5 is max)
• Most useful aspect: how to declare and deadlines (40%)
• Also the area where more attention would be needed (40%)
• 97% would come to a similar training again
• 98% think they’d implement the lessons learned

18. Phase 2: next steps

19. Open questions for phase 2
Phase 1: effects on knowledge…
à 1. Do these effects translate in better declaration outcomes?
Phase 1: training is effective, but attendance is low
à 2. How to increase attendance rates?
Phase 1: training seems too short
à 3. What else can RRA do to improve TP education?

20. Phase 2: overview
Data collection: continue registration process
1. Compliance behaviour
• Probability of filing, Probability of nil-filing, Amount reported
• All new taxpayers
2. Boosting attendance: Lottery
• Pilot a way to boost attendance
• Up to 8 trainings
3. Personalised attention: One to one program
• Pilot a program to personalise attention: one to one program of calls
• 200 taxpayers

21. Sustainability and next steps
• Test effectiveness before adoption by RRA
• Lottery seems relatively cheap (vs individual allowance)
• Calls will be harder to scale up, but could be a smaller program
• TPS department is heavily involved in the pilot
• Build a culture of evaluation
• Build capacity
• Pilot new processes (registration)

22. Overview of evaluation
RRA invites all new
taxpayers to the training
Some taxpayers attend the
training
Effects of the training on:
• Knowledge
• Perceptions
• Compliance behaviour
Some taxpayers do not
attend the training
No expected effects of the
training (except possible
spillovers)
RRA’s list of
new taxpayers
Attendance data,
Survey data
Survey data
Data from returns
Data sources: Analysis:
1. Attendance rates
and self-selection
2. Effectiveness of
RRA education
program
Lottery
One-to-one Training

23. Thank you
Comments welcome