Abstract:
The real estate sector is one of the fastest growing sub-sectors in the Ghanaian economy.
According to the Ghana Revenue Authority, rent income tax collected from this sector
has not been encouraging. This study seeks to determine the factors affecting rent income
tax compliance in Tarkwa Nsueam and Sefwi Wiawso Municipalities. The study used
quantitative approach. Simple random sampling was used to select 278 property owners
as the sample size. Data was collected using a structured questionnaire; coded, keyed and
analysed using descriptive statistics: mean, frequency and standard deviation. Inferential
statistics including Pearson correlation coefficient and multilinear regression model were
used to infer population characteristics from the sample. The findings indicate that; rent
income tax compliance cost had a negative effect on the level of rent income tax
compliance. However, rent income tax knowledge and education had positive effect on
the level of rent income tax compliance, rent income tax fines and penalties had positive
effect on the level of rent income tax compliance while perceived opportunity for rent
income tax evasion by property owners had a negative effect. Majority of property
owners had no knowledge of rent income tax law and most property owners do not know
how to declare their rent income for tax purpose. Thus, high rent income tax compliance
cost and high opportunity for rent income tax evasion will reduce rent income tax
compliance among property owners. Appropriate fines and penalties should be enforced
to deter property owners from evading rent income tax. Tax authorities should intensify
education on rent income tax compliance, simplifying processes involved in filling rent
income tax returns.
