The Slovakian government had a problem. Retailers often failed to register purchases so they could avoid paying VAT (a form of European sales tax) and a steep decline in VAT revenue had been noted over the past 10 years.
Traditional methods of catching VAT-evading culprits—hiring auditors and taking people to court—was proving an increasingly expensive option so the government hit on a novel idea. They decided to tackle the problem by introducing a lottery.
Slovakians are now encouraged to collect all their sales receipts and register them. This provides the government with a paper trail that ensures Slovakian business owners are forced to pay their VAT.
The advantages for the government are obvious and players are highly incentivized to play the game, and register their receipts, because the monthly prizes include €10,000 cash, a car, or the opportunity to become a contestant on the Slovakian version of The Price Is Right.
Slovakian factory worker Jozef Lazarcik, 35, recently won a new car. He couldn't believe his good luck when he heard his number called out on national TV because he'd only registered nine receipts.
"It’s a heavenly feeling," Lazarcik said. He is now encouraging his friends to register their receipts as well. Such reactions are common so each time the lottery comes up trumps for a player the government gets a big win too.
About 60 Million receipts have been registered since the lottery was introduced last year and Slovakian tax officials state they have already seen an about turn in figures.
Many other European countries are now considering the introduction of similar lotteries.
