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.