Most governments treat tax evasion as a war. They hire investigators, audit the businesses that look suspicious, and punish the ones they catch. It is expensive, it is adversarial, and it never quite works. There is always more cheating than there is budget to chase it.
Taiwan looked at the same problem in 1951 and tried something almost nobody else has. Instead of punishing businesses for hiding sales, it turned every receipt into a lottery ticket and let ordinary citizens do the policing. Tax revenue jumped 75% in a single year, and three-quarters of a century later the system is still running.
⚡ Speed Run Notes
- The problem: when small businesses run on cash, tax evasion is easy and auditing everyone is too expensive to ever work.
- Taiwan’s 1951 move: unify every receipt into one government system, then turn each receipt number into a lottery ticket, the Uniform Invoice Lottery.
- The engine: Core Drive 7 (Unpredictability & Curiosity). Every purchase becomes a chance to win, so consumers start demanding receipts instead of waving them off.
- The flip: citizens turn from tax-evasion accomplices into volunteer auditors. A shop cannot skip the receipt when the customer wants it.
- The payoff: tax revenue rose 75% in year one (NT$29M to NT$51M); top prizes now reach NT$10 million (about US$320,000); the model has run for 75 years.
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About the Creator of the Octalysis Framework
Yu-kai Chou created the Octalysis Framework after studying gamification since 2003 — years before the term entered mainstream vocabulary. As a Human-Systems Architect & Behavioral Designer, his framework has been applied by LEGO, Microsoft, Porsche, Coca-Cola, Salesforce, and MrBeast, impacting over 1.5 Billion Users.
Chou has taught the Octalysis methodology at Harvard, Stanford, Yale, Tesla, Google, BCG, and IDEO.
His work has been cited by Harvard, Stanford, MIT, Forbes, Wall Street Journal, Wired, US Department of Energy, NIST, NSF, NCBI, US Department of Education, ClinicalTrials.gov, and 3,700+ more academic publications. Explore his books here.
Government Gamification on Tax Collection
Taiwan is my home country, and as I became more knowledgeable in gamification, I continue to be more impressed with the level of gamification implemented in its society and culture (without these innovations ever really being called gamification).
One of the things I have been most impressed with is how the Taiwanese government uses gamification — specifically Rolling Rewards — to ensure tax compliance.
Tax evasion is common in most countries, where businesses prefer to take cash over credit cards so they could report less on their earnings.
Most countries use the penalizing Core Drive 8: Loss & Avoidance by cracking down and punishing companies that evade taxes when they are caught. But besides a chronic lack of complete enforcement, it is also costly to investigate all the businesses suspected of tax evasion.
Introducing Core Drive 7 into Taiwan’s gamified tax collection process
As early as 1951, the Taiwanese government sought to resolve this problem by doing two things.
First, it unified all receipt and invoicing systems into a central system. This means that all businesses that give out a receipt would have the unique receipt number and amount sent to the government for tax reporting.
But the second step is where we see real 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, with the first place winning the equivalent of $62,000 (about 5 years worth of salary for an average new college graduate), second place $6,200, and scaling all the way down to $7 wins.
Because of this “Uniform Invoice Lottery” system, consumers are now demanding receipts and invoices from businesses, preventing the businesses from evading taxes by exchanging cash under the table.
Not only that, consumers are likely willing to spend more since every time they make a purchase they can become a winner, boosting the economy in the process.
Even my grandmother has won many of the small $7 and $31 wins over the past two decades, just by doing what she already does — buy groceries, food, and gas.
As a result of the Uniform Invoice Lottery, the Finance Ministry collected 75% more in tax revenue in 1951 than the year before, with collections climbing from NT$29 million to NT$51 million in a single year. Great ROI, especially for a government program.
This has been so successful that the government added much higher prizes after that, topping at over $300,000 prize money, or the equivalent of over 25 years of salary.
In 2006, the Taiwanese government even started to transition these unified invoices into e-invoices, reducing the involved processing costs by $250 million and saving 80,000 trees every year.
Why a Lottery Beats a Crackdown
Here is the part most people miss. The genius of the Uniform Invoice Lottery is not that it motivates businesses. It is that it motivates everyone else.
A traditional crackdown runs on Core Drive 8: Loss & Avoidance, the fear of getting caught. That fear only works on the people you can credibly threaten, and threatening every cash-only noodle stand in the country is impossible. So Taiwan pointed a different motivator at a different group. By turning each receipt into a Core Drive 7 draw, it gave millions of consumers a personal reason to demand the one piece of paper a tax-dodging business least wants to hand over.
That flips the entire enforcement model. The shop owner who used to “forget” the receipt now faces a customer who insists on it, because that slip might be worth NT$10 million. Overnight, the public becomes an unpaid auditing network. This is where Core Drive 5: Social Influence & Relatedness kicks in too. Almost everyone in Taiwan knows someone who has won, so asking for your receipt is not being difficult. It is simply what people do.
The economics are the quiet punchline. Crackdown-style enforcement scales with headcount: more auditors, more cost, diminishing returns. Lottery-style enforcement scales with desire. The more people want to win, the harder the system polices itself, and the prize pool stays a rounding error against the revenue it unlocks. That is why a 75-year-old program still pays for itself.
One design lesson is worth sitting with. Core Drive 7 and Core Drive 8 both live on the bottom row of the Octalysis octagon, the Black Hat drives that push behavior through tension rather than fulfillment. Structurally, a surprise audit and a surprise jackpot are cousins. The difference is how they feel. One lands as punishment; the other lands as play. Same pressure, opposite experience. That gap is the whole reason one approach breeds resentment while the other built a habit an entire country has kept for decades.
We should see more of our governments implementing innovative solutions by motivating and engaging its constituency instead of just clamping down harder or making punishments for infractions more severe.
If you’re interested in how the Octalysis Framework explains why systems like this work, check out the posts below.
Related Reading
- Core Drive 7: Unpredictability & Curiosity
- Core Drive 8: Loss & Avoidance
- The Octalysis Framework for Gamification & Behavioral Design
- What is Gamification?
- 90+ Gamification Stats, Examples & Cases with ROI
- Books by Yu-kai Chou