The €2 Experiment That Changed Everything We Know About Tax Collection
Let me share a €2 experiment you will love.
Fresh from witnessing groundbreaking digital transformation case studies at a workshop in Ljubljana, Slovenia, I’m compelled to share another story (check the first one here) that perfectly illustrates why timing is everything in government digitalization—and how a simple €2 tax bill became an important thing in system design.
The workshop was extraordinary. Public sector leaders from across Europe gathered to examine real-world digital transformation successes, sharing hard-won insights about modernizing government systems. But among all the sophisticated case studies and impressive statistics, one more story stood out because of its elegant simplicity.
When Breaking the Law Becomes Research
Let’s say you’re a tax consultant who receives a routine business fee notice for €2. Two euros. The price of a decent espresso (not in Croatia, though). What would you do? Pay it and move on, like any rational person?
Not if you’re curious about how tax collection systems really work when theory meets reality.
During the Ljubljana workshop, one of the most compelling presentations came from a seasoned consultant who shared an extraordinary experiment. In 2019, he made a decision that would fundamentally change how everyone in the room thought about government digitalization. He deliberately chose NOT TO PAY a €2 tax bill—not out of defiance, but as a controlled test of system responsiveness.
His goal was to understand what happens when a simple transaction enters the labyrinth of traditional government collection systems.
But as he later admitted to our workshop audience, this experiment carried a hidden risk that made it far more significant than just academic curiosity. If the system had failed to respond—if his deliberate non-payment had gone completely unnoticed—he would have inadvertently discovered that the tax collection system was fundamentally broken. Worse yet, this knowledge could have created a moral hazard: future non-compliance might seem consequence-free based on his “successful” test of system negligence.
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Fortunately for government integrity (and unfortunately for his wallet), the system did respond. What he discovered was both fascinating and deeply troubling.
The Anatomy of Administrative Cascade Failure
Week 1: Silence. The system operates on good faith—perhaps the payment is delayed, maybe there’s a banking hiccup.
Week 4: A polite reminder appears in his mailbox. “Please note your outstanding liability of €2.00.” Reasonable. Professional. Still manageable.
Month 2: The tone shifts. A formal notice arrives, and his €2 debt has grown to €2.50 due to administrative processing fees. The collection machinery is awakening.
Month 3: Escalation. Registered mail—costing €3.50 to send—delivers another notice. His total debt: €6.00. The collection cost now exceeds the original tax by 300%.
Month 6: Legal proceedings commence. Lawyers engage. Court costs accumulate. Enforcement procedures activate. His €2 debt has metastasized to €27.
Month 12: After a full year of deliberate neglect, the final tally reaches €47. A staggering 2,350% increase from the original amount.
But here’s what shocked the entire Ljubljana audience: When he finally decided to resolve this administrative nightmare, it took exactly 30 seconds on his smartphone.
Thirty seconds to end what had become a year-long odyssey involving dozens of letters, three government departments, and administrative costs that far exceeded any possible recovery.
The Hidden Mathematics of Government Efficiency
The presenter’s €2 experiment wasn’t just an exercise in controlled procrastination—it revealed a mathematical law that governs tax collection systems worldwide. Every day a debt remains uncollected, its probability of recovery drops exponentially.
The data is sobering:
- Fresh debt (0-30 days): 95%+ collection probability
- 3 months old: 91% probability (9% loss rate)
- 6 months old: 60% probability (40% loss rate)
- 1 year old: 30% probability
- 3 years old: Essentially 0% probability
This isn’t just about money—it’s about system design philosophy. His government spent approximately €35 trying to collect the €2 debt, creating a 17:1 cost ratio that’s typical across many administrations worldwide.
The Real-Time Revolution
Here’s where the Ljubljana workshop insights become crucial. The most successful digital transformations shared one common characteristic: they eliminated time gaps between service delivery and payment processing.
Consider the financial impact of timing alone. A tax administration collecting €1 billion annually faces this choice:
- Traditional batch processing (6-month delays): 40% loss rate = €400 million uncollected
- Real-time digital processing: 5% loss rate = €50 million uncollected
- Net difference: €350 million additional revenue from timing optimization alone
The technology exists. The payment infrastructure is mature. The only barrier is organizational inertia.
Lessons learned
The most successful case studies we examined in Slovenia followed a remarkably consistent pattern:
- Week 1: Map current collection timelines with surgical precision
- Week 2: Identify every bottleneck causing delays
- Week 3: Design real-time alternatives using existing technology
- Week 4: Pilot with low-risk, high-frequency transactions (More about risk management)
- Month 2: Measure and document improvement in collection rates
- Month 3: Scale successful approaches across the organization
The winners didn’t try to revolutionize everything at once. They started with the digital equivalent of my €2 experiment—small, frequent transactions where the cost of traditional processing clearly exceeded any reasonable return.
What Users Actually Want vs. What They Say They Want
The Ljubljana workshop taught me to distinguish between stated requirements and behavioral requirements—a distinction that the presenter’s €2 experiment illustrated perfectly.
If you had surveyed him as a taxpayer before his experiment, he would have given you reasonable, socially acceptable answers: “Email reminders are fine.” “Monthly statements work.” “I don’t mind logging into a portal to make payments.” These are stated requirements—what users think they should want or what seems reasonable when asked directly.
But his actual behavior revealed something entirely different. By deliberately not paying that €2, he demonstrated what behavioral requirements research consistently shows: users don’t want better ways to handle routine administrative tasks—they want to eliminate those tasks entirely.
The most successful digital transformations showcased in Slovenia understood this critical distinction. Instead of asking citizens, “How would you prefer to receive tax notices?”, they observed citizen behavior and asked, “How can we eliminate the need for tax notices altogether?” This shift in thinking led them to design systems that automatically deducted small fees, sent instant confirmations, and required zero ongoing taxpayer attention for routine transactions.
The presenter’s €2 experiment proved their approach was correct. The real requirement wasn’t improved collection processes—it was the elimination of unnecessary cognitive load on taxpayers. When payment takes 30 seconds but avoidance creates a year-long administrative nightmare, the system is fundamentally misaligned with human behavior.
This behavioral vs. stated requirements framework explains why so many government digitalization efforts fail. They digitize what users say they want (better forms, clearer websites, faster processing) rather than what user behavior reveals they actually need (invisible, automatic, worry-free interactions).
That’s why I believe it’s very important to know how to understand user requirements. Click here to find out how.
The Strategic Imperative
Every day, government organizations delay implementing real-time collection systems; they’re essentially conducting their own version of my €2 experiment—except instead of €2, they might be watching millions slip away through preventable administrative inefficiency.
The workshop in Ljubljana demonstrated that the technology barriers have largely disappeared. Cloud infrastructure, mobile payment systems, and automated processing capabilities are mature and accessible. The challenge isn’t technical—it’s organizational courage to abandon familiar but inefficient processes.
The Bottom Line
My €2 experiment taught me that in government digitalization, timing isn’t just important—it’s everything. The difference between immediate processing and delayed processing isn’t merely operational; it’s the difference between functional government service and administrative theater.
The most profound insight from Ljubljana wasn’t about any specific technology or platform. It was the recognition that every government transaction is either building citizen trust through efficiency or eroding it through unnecessary complexity.
As I reflect on those 30 seconds it took to resolve the presenter’s year-long administrative saga, I’m reminded that the future of government service isn’t about deploying cutting-edge technology—it’s about designing systems that respect both citizen time and taxpayer money.
The question isn’t whether governments can afford to digitize their collection systems. After witnessing the innovations in Slovenia and hearing about this accidental research experiment, I’m convinced they can’t afford not to.
Sometimes the most powerful insights come from the smallest experiments. In this case, it was €2 well spent on understanding how much 30 seconds of good system design is really worth.
Related posts:
A deliberately unpaid €2 tax bill escalated to €47 over 12 months, involving multiple departments, legal proceedings, and €35 in collection costs, while final resolution took just 30 seconds via smartphone.
This demonstrated that traditional batch processing creates exponentially higher costs and lower collection rates compared to real-time digital systems.
Collection probability drops dramatically with time: 95%+ for fresh debt (0-30 days), 60% at 6 months, and 30% at 1 year. A government collecting €1 billion annually could recover an additional €350 million simply by switching from batch processing (40% loss rate) to real-time processing (5% loss rate).
Users say they want “better payment reminders” or “clearer notices,” but their behavior reveals they actually want to eliminate routine administrative tasks entirely. Successful digital transformations design systems that remove cognitive load from citizens rather than just digitizing existing painful processes—the real requirement is invisible, automatic, worry-free interactions.
