Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 123

Full Length Research Paper

Do economic variables still influence tax compliance intentions of self-employed persons in developing economies? Evidence from Ghana

Jones Adjei Ntiamoah
  • Jones Adjei Ntiamoah
  • Department of Accounting and Finance, Faculty of Business, Accra Technical University, Ghana.
  • Google Scholar
David Sarpong Jnr.
  • David Sarpong Jnr.
  • Department of Accounting and Finance, Faculty of Business, Accra Technical University, Ghana.
  • Google Scholar
Ernest Christian Winful
  • Ernest Christian Winful
  • Department of Accounting and Finance, Faculty of Business, Accra Technical University, Ghana.
  • Google Scholar


  •  Received: 22 September 2019
  •  Published: 31 October 2019

Abstract

The purpose of this study was to establish whether tax compliance intentions of tax-registered self-employed persons are still influenced by economic variables instead of non-economic variables which are now at the centre stage in tax compliance research. A quantitative research design based on a survey of 453 self-employed persons randomly selected from 15 Small Taxpayers’ Offices across the Greater Accra region was used. Data was analysed using the Statistical Package for Social Sciences (SPSS) version 24 software complemented with a correlation analysis and validated using multiple regression and one-way analysis of variance.  Results indicate that if the Ghana Revenue Authority (GRA) conducts frequent audits on business records and activities, and imposes lower tax rates on self-employed persons, a moderate but positive effect on tax compliance could be achieved. The results also indicate that higher fines could have a moderate negative effect on tax compliance decisions. Lastly, the level of income of self-employed persons was found to have weak but positive effects on their tax compliance intentions. The overarching results from this study indicate that economic variables do have positive but moderate effects on tax compliance intentions of self-employed persons in developing economies. It was recommend that the tax administration authority  should not place too much emphasis on higher fines and imposition of higher income tax rates to encourage voluntary compliance, but instead, should place more emphasis on auditing of records and returns, and engage and provide holistic support to enable self-employed persons to grow and expand their businesses.
 
Key words: Tax, compliance, self-employed persons, Ghana, underreporting.