Tax education and tax compliance: a study of the self-employed in the cape coast metropolitan assembly of Ghana

Abstract

The level of tax knowledge is a key indicator of the level of tax compliance, which also affects the amount of the tax revenues available to support government projects and programmes. In Ghana, the level of compliance among the self-employed is low according to the Institute of Statistical Social and Economic Research (ISSER) and the Ghana Revenue Authority (GRA). It is believed that the level of compliance among these selfemployed will be improved with tax education. This study seeks to investigate the relationship between tax education and tax compliance among the selfemployed in the Cape Coast metropolis. The study applied the quantitative approach by designing closed–ended questionnaires to collect the appropriate numerical data necessary to address the study objectives. Tax compliance is represented by committed, capitulative and creative compliances. Tax education is also represented by five proxies. A total of 400 respondents were drawn from the estimated self-employed population of 28,355. The study adds to the body of existing knowledge on tax education and tax compliance. The key findings from the study indicate that tax education affects tax compliance among the self-employed, however, the nature of the relationship depends on the type of the content of tax education and the type of compliance to be achieved. Generally, tax compliance segregation into committed tax compliance, capitulative tax compliance and creative tax compliance has significant bearings on overall tax compliance. The study recommends that the tax laws should be made less complex to ensure compliance, penalties must be enforced, and tax payers must educate themselves more on tax laws. The GRA must also organise seminars and conferences to educate tax payers.