Abstract:
By far a lot of research has been done but the outcome of this study will
strengthen the systems of GRA by way of employing all the necessary strategies
probably going beyond what they do to close the loop holes thereby reducing the rate
of tax evasion. The main objective of the study was to examine tax evasion and its
effects on the Ghanaian economy with evidence from Cape Coast Metropolis. The
research was a case study which blended both qualitative and quantitative methods in
data collection and analysis in getting to the bottom of issues discussed. The
population of the study were all the tax officials of the GRA and businesses in the
Metropolis. Convenience sampling method were used to select 120 businesses and
five GRA staff. With the help of SPSS version 16, all the results were analyzed using
charts and frequency distribution tables. The study revealed that most tax payers lack
the fundamental knowledge on the tax payment process. It was again found that even
though the level of evasion was high, there were no evidence of sanctions applied to
anyone found culpable. It was revealed also that both categories respondents were
very much aware that tax evasion reduces government revenue thereby affecting
governments’ ability to provide the citizenry with the needed infrastructural
development. The researcher then recommended that the GRA in the Metropolis
should embark on tax education on payment processes, and the importance of tax to
the national economy. It again recommended that appropriate reviews of tax processes
should be integrated into the entire tax system to encourage taxpayers’ compliance.
The GRA should in their attempt to profile businesses and individual tax payers,
collaborate with Electricity Company of Ghana since ECG has a complete data of all
commercial structures, to help them in their search for people liable to pay taxes.
