Estimating the Underground Economy and Tax Evasion in Ghana

Asante, Stephen

doi:10.2139/ssrn.2013176

Cited by 7 publications

(7 citation statements)

References 9 publications

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“…Fourthly, the results show that the Ghanaian economy is characterized by a high underground economy and tax evasion levels, with tax evasion averaging 20.78 per cent of GDP over the period. The results are consistent with Asante (2012), who estimated that tax evasion ranges from 4 per cent to about 14 per cent of GDP.…”

Section: Discussionsupporting

confidence: 91%

“…The CDA has also been used in calculating the underground economy and tax evasion in some developing and emerging economies. For example, Saunders and Loots (2005) for South Africa; Koyame (1996) for eight sub-Saharan African countries; Ariyo and Bekoe (2012) for Nigeria; Bekoe (2012) for seven selected African countries; Asante (2012), Annan et al (2014) and Asiedu and Stengos (2014) for Ghana. These recent applications of the currency demand method for developing and emerging economies are significant in offering new understandings into the size and causes of tax evasion in these tax jurisdictions.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As a result, various methods have been developed since the 1950s by various researchers to calculate the size of the hidden economy and the extent of tax evasion in several tax jurisdictions. These include Cagan (1958), Allingham and Sandmo (1972) and Tanzi (1980) in the USA; Matthews (1982) in the UK; Klovland (1984) in Norway and Sweden; Bajada (1999) in Australia; Giles (1999a, 1999b) in New Zealand; Koyame (1996) in eight sub-Saharan African countries; Schneider (2002) in 21 OECD countries; Giles and Tedds (2002) in Canada; Ariyo and Bekoe (2012) in Nigeria; Asante (2012) and Bekoe (2012) in Ghana and Cebula and Feige (2011) in the USA. These methods can be classified into three categories, namely, direct, indirect and modelling[3] approaches.…”

Section: Introductionmentioning

confidence: 99%

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An estimation of the underground economy and tax evasion

Amoh

Adafula

2019

JMLC

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PurposeThis paper aims to use an econometric model to estimate tax evasion from the size of the underground economy and examined the factors that trigger it.Design/methodology/approachThe study used time series data sourced from world development indicators and Bank of Ghana covering the period 1990-2015 to estimate tax evasion from the underground economy using an autoregressive distributed lag model drawing on the currency demand approach.FindingsThe results confirmed the existence of a large underground economy and a high incidence of tax evasion in Ghana. The Ghanaian situation has been aggravated by an underground economy-triggering factor of mobile money activities, which increased by 83.1 per cent in 2015. Tax evasion averaged 20.78 per cent of GDP over the period. The study, thus, concludes that the increased number of mobile money activities, high tax burden and unemployment contribute to the worsening of the tax evasion problem in Ghana.Originality/valueThe study is one of the premier attempts to introduce electricity power consumption variables in the currency demand model to estimate tax evasion from the size of the underground economy. The authors hypothesize that the emergence of mobile money activities in its current form triggers underground and tax-evading activities. The study, thus, calls for the formalization and regulation of the operations of mobile money activities in emerging economies as a way of managing the underground economy, which incubates tax evasion.

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Section: Discussionsupporting

confidence: 91%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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An estimation of the underground economy and tax evasion

Amoh

Adafula

2019

JMLC

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“…The revenue from gambling is considered important for local government growth especially in social development (4,5). However, there is a general secrecy about gambling winnings especially when gained illegally (6,7). Many young people who participate in gambling are more likely to live with parents.…”

Section: Introductionmentioning

confidence: 99%

Participation and attitudes towards gambling in Ghanaian youth: an exploratory analysis of risk and protective factors

Glozah

Tolchard

Pevalin

2019

International Journal of Adolescent Medicine and Health

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Purpose There is little information on youth gambling in Ghana even though there is an unprecedented emergence of various types of gambling and gambling venues throughout the country. The aim of this cross-sectional exploratory study was to examine the role of perceived social difficulties and perceived protective social factors in participation and attitudes of Ghanaian youth towards gambling using data from a school-based survey (n = 770). Methods Participants completed measures on perceived social difficulties, perceived protective social factors, attitudes towards gambling and participation in four types of gambling. Results Sports betting was the most common form of gambling. There were significant differences in gambling participation with males gambling more than females. Youth who reported more perceived social difficulties from family and friends had a more positive attitude and a negative attitude towards gambling, respectively. Youth who reported higher protective social factors from family and teachers were less likely to have a negative attitude towards gambling. In all situations, high frequency gambling resulted in a more positive attitude towards gambling. Conclusion Perceived social difficulties influences Ghanaian youths to have a positive attitude towards gambling, however, protective social factors from family and teachers may help youth to have a negative attitude towards gambling, gamble less and consequently achieve academic success.

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“…In developing countries such as Ghana, the amount of tax lost through evasion is relatively large. Asante (2012) estimated the underground economy in Ghana from 1990 to 2010 and revealed that it accounts for about 48 per cent of the official economy on average. The study also estimated tax evasion which accounted for about 4-14 per cent of the official economy.…”

Section: Introductionmentioning

confidence: 99%

Socio-demographics of tax stamp compliance in Upper Denkyira East Municipal and Upper Denkyira West District in Ghana

Amponsah

Adu

2017

IJLMA

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Purpose The purpose of the study is to analyse social and demographic factors that affect tax stamp compliance in Upper Denkyira East Municipal and Upper Denkyira West District in Ghana. Design/methodology/approach The study adopted a cross-sectional survey design to sample 783 micro-taxpayers through the use of multi-stage sampling technique. Primary data were collected from micro-taxpayers by using a structured interview. Ordered logit regression model was used to regress the extent of tax stamp compliance on socio-demographic factors in relation to tax stamp cases in the study area. Findings The study found that occupational association status, location, gender, type of business operated, age, level of education and household size are significant predictors of tax stamp compliance in the study area. Originality/value The originality of the study is in twofold. First, the study dwells on extant literature on social and demographic factors of tax compliance in general and specifically applies them to a special kind of presumptive tax, tax stamp, in Ghana. The study is also considered as the first of its kind to perform rigorous statistical analysis of social and demographic factors in relation to tax compliance.

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Estimating the Underground Economy and Tax Evasion in Ghana

Cited by 7 publications

References 9 publications

An estimation of the underground economy and tax evasion

An estimation of the underground economy and tax evasion

Participation and attitudes towards gambling in Ghanaian youth: an exploratory analysis of risk and protective factors

Socio-demographics of tax stamp compliance in Upper Denkyira East Municipal and Upper Denkyira West District in Ghana

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