The Kingdom of Lesotho, a country of 2 million people in Southern Africa, finances most of its  government expenditures through revenue from the Southern Africa Customs Union (SACU). However, in the late 2010s, Lesotho’s SACU revenues declined significantly, leading the country’s government to prioritize increasing levels of domestic revenue to finance its development program.

One of the major challenges to mobilizing domestic revenue in Lesotho was low voluntary compliance with tax regulations. To tackle this problem, in 2019, the government launched the Lesotho Tax Modernization Project.

The Government of Lesotho approached TDL to increase tax compliance by leveraging behavioral insights, ultimately promoting economic growth and reducing poverty.

In Lesotho, low tax compliance is a major challenge. We developed a behavioral toolkit to address the causes of tax evasion.

We helped a leading fintech company redesign their app to increase conversions and engagement.

Improving financial inclusion through evidence-based behavioral product design

Less than 20% of people who need a hearing aid actually wear one. We developed a behavioral strategy to fix this.

Improving adoption of hearing aids through psychographic profiling

Behavioral Framework to Increase Tax Compliance | Behavioral Science Case Studies

Increasing Tax Compliance Through Behavioral Science

Building a behavioral framework to increase tax compliance in Lesotho

Building a behavioral framework to increase tax compliance in Lesotho

Overview

The Challenge