This study departs from focusing on the level of tax relief utilization by focusing on the factors contributing to the low trends and how utilization of personal tax relief can influence tax evasion from the premises of the Allingham-Sandmo (A-S) theory. This study considered respondents working within the formal sector of Ghana. Data was collected through the use of questionnaire after the stratified sampling technique was used to select 136,131 respondents across service, industry and agricultural formal sectors in the country. The study identified a low level of awareness of the personal tax reliefs and the factors that contributed to this were ignorance of the existence of personal reliefs; frustration in filling the tax relief/returns forms; the cost of assessing the reliefs which outweighs the benefits and avoidance of contradictory personal information. It was also identified that, utilization of the tax relief can result in the prevention of tax evasion. It is recommended that, a sound education of taxpayers in focal areas of the tax system is needed especially in the various HR units during the initial stages of employing staffs. Also, the reliefs should be simple to claim through the use of computerized systems and finally, there should be an upward review of the reliefs to motivate taxpayers.
Key words: Personal tax relief, Allingham-Sandmo (A-S) theory, tax evasion, Ghana.
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