Tax compliance among self-employed in the Bawku West District of Ghana

Abstract

Issue of tax non-compliance has remained a major canker in Ghana because of deliberate attempt of people not to file and pay their taxes. Few investigations on the drivers of tax compliance behaviour have revealed mixed findings because they were not able to establish a comprehensive factor that drive people to comply with tax obligation. The dearth of clarity on what drives people to comply with tax limits a proper understanding on tax policy formulation. In view of this, the study explored how tax compliance drives tax compliance behaviour among self-employed in the Bawku West District. The study proposed a comprehensive framework that institutional factors, economic factors, individual factors and social factors drive tax obligation behaviour among self-employed. This study employed the quantitative approach with both cluster and convenience sampling technique and questionnaire as data collection instrument. SPSS was used for processing data while Structural Equation Model (SEM) was used to test the four hypotheses. The study result shows that, among the four factors, institutional, individual and social factors are the key determinants of tax compliance among self employed. The study did not find any positive relationship between economic factors and tax compliance behaviour. The study recommended that tax authorities must simplify all the complex processes that tax payers go through during tax filling. Government may consider employing mobile money services to help facilitate tax payment among self-employed.