We’ve written about the potential for using social norms to decrease tax evasion. Armenia is turning to lotteries (whose attraction is explained by Prospect Theory). Given the relative weakness of the state in Armenia, compared to say, the U.S., an innovative use of lotteries might be a good option.
Armenia is offering thousands of dollars in lottery prizes to consumers who take receipts for their purchases to try to tackle rampant tax evasion in the former Soviet republic.
The initiative began on Jan. 1 and the first prizes will be awarded this month, after authorities said the threat of prosecution had failed to encourage shopowners and market sellers to install cash registers and provide receipts.
“It’s no secret that not many people give receipts in Armenia,” said Armen Alaverdyan, deputy head of the State Revenue Committee.
Hat tip: Brian Stoner