Lotteries to get shoppers to stop firms avoiding tax

As early as 1951, the Taiwanese government sought to address this problem by doing two things. First, it unified all receipt and invoicing platforms into a central system, which meant that all businesses which gave out receipts would automatically send the unique receipt numbers and invoice amounts to the government for tax reporting. (In fact, in Taiwan most people don’t need to hire accountants to do their taxes - the government can directly tell you how much you owe them or how much they should return to you).

But the second step is where we see true innovation. The Taiwanese government turned each receipt and invoice number into a lottery ticket for citizens to play. For every odd-numbered month, citizens can see if their receipt numbers match the winning prize. The first place would win the equivalent of $62,000 - about five years of salary for an average new college graduate, while the second place would win $6,200, with subordinate prizes scaling all the way down to $7.

In Taiwan, every eligible receipt number became a lottery entry. Shoppers gained a personal reason to request paperwork that some sellers might otherwise avoid issuing.

The intervention changed who benefited from the record. Tax enforcement no longer depended entirely on distant inspection; the customer at the till now had an interest in making the transaction visible. A bottle deposit uses a similar structure by giving the person nearest the discarded item a reason to recover it. Rewards for reporting faults or near misses can make previously unrewarded attention worthwhile.

The lottery mechanism carries risks. It may encourage additional spending, affect income groups differently or allow excitement to displace the public purpose. Its value has to be judged against tax compliance and administrative cost, not participation in the game alone.

The useful design question is often who stands nearest the missing evidence. That person may currently receive no benefit for collecting it, preserving it or asking for it. A small uncertain reward can support repeated action when a guaranteed payment for every case would be unaffordable. At the till, before cash and missing paperwork become an enforcement case, the shopper asks for the receipt. That routine request is the behaviour the scheme needed.