A descriptive study of the perceptions and motivations of consumers on how to successfully implement a tax lottery in South Africa to improve tax compliance behaviour

Abstract

Background: Tax revenue collected from taxpayers is essential as it enables the government to provide necessary public goods and services. However, the government faces a significant obstacle due to taxpayer non-compliance. Enhancing overall tax compliance should, therefore, play a key role when trying to improve the efficacy of tax collection. Literature reviewed during this study indicated that implementing a tax lottery system might increase tax compliance, as taxpayers have a chance of being rewarded for being compliant. It is expected that this incentive may lead to an increase in voluntary tax compliance and tax revenue collected. Main purpose of study: This study aimed to analyse the perceptions of consumers with regards to implementing a tax lottery in South Africa by focusing on which factors would motivate consumers to participate. The study also sought to determine which platforms would create a positive awareness about a tax lottery. Method: This descriptive study was based on a pragmatic approach. Furthermore, an inductive research approach was adopted for this study based on primary data obtained through the use of a survey as a data collection instrument. Results: There is not a substantial amount of research available on implementing tax lotteries in developing countries such as South Africa. The literature reviewed during this study has, however, concluded that tax lotteries are becoming a more popular method to increase tax compliance behaviour rather than the stringent traditional methods used. Through the literature reviewed and survey conducted, it was evident that there are quite a few factors that need to be considered when designing and implementing a tax lottery in South Africa. Its design should be effective and efficient to ensure an increase in voluntary tax compliance, with strategic promotion playing a significant role in the success of the tax lottery and thus the improvement in tax compliance behaviour. Conclusions: The implementation of a tax lottery in South Africa may improve the tax compliance behaviour of taxpayers. Taxpayers will need to be made aware of the tax lottery as well as the fact that they may be rewarded for being tax compliant, which may lead to an increase in tax compliance. This will enable the government to provide necessary public goods and services and reduce overall public debt.