Antecedents of tax compliance of small and medium-sized enterprises (smes): the perspective of tamale metropolis

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It is generally recognised that tax avoidance and evasion are the primary contributors to low tax efforts in developing nations. The fact that a larger and rising proportion of economic activities are carried out in the informal sector is one of the primary contributors to tax evasion in economies that are still in the process of developing or transitioning. To reduce tax evasion and avoidance among firms, the Ghana Revenue Authority introduced the electronic tax system. It is for this reason that the current study examines the contribution of attitude toward electronic tax system, adoption of electronic tax system, and isomorphic forces to tax compliance among SMEs in Ghana. A total of 225 SMEs within the Tamale Metropolis were used for the study. First, the findings indicate a significant and positive association between tax compliance and attitude toward the computerized tax system. The adoption of a favourable perspective on electronic tax filing in the Tamale Metropolis has been shown to enhance levels of tax compliance. Second, the results also show a strong positive link between tax compliance and the use of the e-tax system. The use of the e-tax system has led to an enhancement in tax compliance within Tamale. Third, there is a positive and significant correlation between isomorphic forces and tax compliance. Taxpayers demonstrate a higher likelihood of timely tax payment when they are subject to pressure, such as via the imposition of fines, enforcement of regulations, or the penalization of non-compliance with tax obligations by the GRA. Following these, the study recommended that the GRA ought to concentrate on boosting e-tax system utilization and guarantee that there is additional awareness of taxpayers on the necessity of tax compliance. The GRA should implement and enforce tax sanctions on those who engage in tax evasion and this might potentially incentivize taxpayers to adhere to tax rules.
A thesis submitted to the department of accounting and finance, kwame nkrumah university of science and technology, in partial fulfilment of the requirements for the award of master of science (accounting & finance)