Abstract:
The purpose of the study was to examine the tax compliance behavior of ownermanagers
of Small and Medium-sized Enterprises (SMEs). The study employed
the survey design underpinned by the quantitative approach to research. The
sample comprised 150 owner-managers of SMEs in the Kumasi Metropolis
selected from three major sectors – manufacturing, trading and services using the
stratified sampling technique. Data was collected using a questionnaire and
analyzed using mean scores and standard deviations. The results show that the
major acts of tax non-compliance committed by SMEs includedunderstatement
of income, failure to file tax returns, and failure to pay taxes within the period
required. It was found that majority of owner-managers of SMEs could not
compute their tax liabilities and file their tax returns by themselves. Moreover, it
was revealed that the factors that influence tax compliance behaviour of SMEs
could be classified into four major categories – economic factors, social factors,
institutional factors, and demographic factors. It was deduced from the findings
that SMEs engage in various forms of tax non-compliance due to their limited
knowledge in taxation and the seeming weaknesses in the tax administration
system in terms of strict enforcement of tax laws and effective tax education.
Hence, it was recommended that the Ghana Revenue Authority (GRA) should
heighten its public tax education and awareness campaigns with the aim of
encouraging positive tax morale among taxpayers
