Replication Data for: Tax compliance and social desirability bias of taxpayers: Experimental evidence from Indonesia

Tax evasion hinders sound fiscal policy and sustainable economic development by reducing government revenue from taxation. Identifying taxpayers who engage in non-compliant behavior is crucial for tax authorities to determine appropriate taxation schemes. However, since taxpayers have an incentive to conceal their true income, it is difficult for tax authorities to uncover such behavior. Empirical studies that use responses to simple direct questions in field surveys suffer from social desirability bias. In contrast to prior work on tax compliance behavior, our study mitigates the bias in responses to sensitive questions by employing the list experiment technique, which allows us to identify the characteristics of taxpayers who are less likely to engage in tax compliance. Using a unique dataset obtained from a tax office in Jakarta, Indonesia, we conducted a computer-assisted telephone interviewing (CATI) survey in 2019. Our results revealed that approximately 13 percent of the taxpayers had reported lower income than their true income on their tax returns. In addition, taxpayers who are old, male, corporate employees, and members of a certain ethnic group tend to exhibit relatively low tax compliance. These findings suggest that our research design can be a useful tool not only for understanding tax evasion behavior, but also for developing more effective taxation schemes, including tax auditing, that promote tax compliance among taxpayers.