The Taiwanese war against tax evasion

This passage reminded me of the Greg Mankiw student who wanted to boost spending through destruct-lotteries on dollar bills.  But this is a way to encourage tax reporting:

It seems tax evasion was a problem for the government in a country
where credit cards are not widely accepted and small business transacts
most business.  The government hit upon the idea of a sales lottery
rather than a sales tax.  Every sales receipt has a lottery number
printed on its back.  Once a month, the government publishes several
newspaper pages of winning numbers.  You can win anywhere between $5
and about $200 if you have a lucky sales receipt.

The government’s theory was everybody would demand a sales receipt
if they had a chance of winning a lottery.  You play anytime you make a
purchase; no matter how small a purchase.  The result is, as the island
has become more prosperous, most people don’t want to bother with
combing through thousands of lucky numbers in a newspaper once a month
to maybe win $5.  Charities stepped in.  Along many streets you see
clear plastic canisters promoting various charitable causes soliciting
your sales receipts.  Retired volunteers go over the numbers on
receipts collected.  It gives non profits a source of funding and gives
old people a steady way to contribute without hard physical labor.  The
Yngge Ceramics Museum I visited last Saturday collected sales receipts
instead of charging admission.  If you were without a sales receipt
(unlikely in this country) you could run across the street to 7-11 and
buy a piece of candy for pennies and come back with a sales receipt.

Here is the full story and thanks to Joel Cretan for the pointer.  Read the whole post, it makes many other interesting points about Taiwan.


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