The Effects of Personal Income Tax Evasion on Socio-economic Development in Ghana: A Case Study of the Informal Sector

Ameyaw, Bismark; Addai, Bismark; Ashalley, Eric; Quaye, Isaac

doi:10.9734/bjemt/2015/19267

Cited by 14 publications

(15 citation statements)

References 15 publications

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“…Tax revenues are the major source of income for governments in financing public services as well as stimulating the economic growth of most developing countries [1]. In recent times, there have been growing concerns by taxpayers on the rapid surge in tax rates aimed at financing public debts and public services yet taxpayers seem not to reap the benefit attached to complying to taxes thus encouraging noncompliant behaviors from taxpayers.…”

Section: Introductionmentioning

confidence: 99%

“…Noncompliant tax intentions leading to tax evasion renders a recess in the economic growth of most developing and emerging economies [2]. Noncompliant behaviors mainly due to unfairness in tax systems in most countries have caused a rise in the number of persons engaging in the underground economic thus posing incessant detrimental effect on the economic growth of both developing and emerging economies [1]. Despite numerous researches in calculating the actual size of the underground economy, such calculations have been futile on the basis that such calculations are only based on estimates.…”

Section: Introductionmentioning

confidence: 99%

“…Governments' annual budget and development plans have seemed to be sluggish due to tax evasion behaviors of taxpayers. A research from [1] shows the top ten countries severely affected by the evasion of taxes as well as tax evasion across continents. From Table 1, the continent mostly affected by the percentage of tax evasion to GDP is South America.…”

Section: Introductionmentioning

confidence: 99%

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Determinants of Tax Evasion: Empirical Evidence from Ghana

Ameyaw¹,

Dzaka²

2016

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For decades, researchers of tax systems and taxation as a whole are in a dilemma on the factors affecting taxpayers' noncompliant behaviors. Numerous experimental and survey results concluded by tax researchers have identified characteristics of noncompliant taxpayers because tax revenues are seen as a major source of income in funding government expenditures. Globalization has called for a huge demand for numerous public services thereby forcing governments into increasing tax revenues to finance these projects. The demand of public service by government and taxpayers shifts the burden of taxes to taxpayers. The gap between tax revenues and tax expenditures are swelling thereby ensuring unbalanced government budgets due to taxpayers' noncompliance. Understanding the causes of tax evasion calls for research into taxpayers' reasons for evading taxes. The main aim of the study is investigating factors that have a detrimental effect on tax evasion in Ghana. In coming out with such factors, this research employed multiple regression techniques and factor analysis. The empirical results obtained from the analysis revealed that taxation and fiscal factors, demographic factors, administrative factors and economics factors are the main factors that have a significant effect on the evasion of taxes.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Determinants of Tax Evasion: Empirical Evidence from Ghana

Ameyaw¹,

Dzaka²

2016

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“…Even those that focus on developing economies such as Ghana (Ameyaw and Dzaka, 2016;Ameyaw et al, 2015), who studied the determinants of tax evasions, has suggested the need to examine the underpinning explanations by which the factors identified thereof translates into tax evasion behaviour of tax payers. In this direction, this study makes the following contributions in advancing the frontiers of knowledge in the tax evasion literature.…”

Section: Discussionmentioning

confidence: 99%

“…However most of these studies are done in developed economise (Clotfelter, 1983;Klovland, 1984;Schneider et al, 2008) with a limited number focused on developing countries. Very few studies discuss the subject matter in the developing countries such as Ameyaw and Dzaka (2016) and Ameyaw et al (2015). Although non-compliance by tax payers is a continual and global problem, many indicators suggest that developing countries in sub-Saharan Africa have had the hardest hit (Annan et al, 2010).…”

Section: Author(s) Agree That This Article Remain Permanently Open Acmentioning

confidence: 99%

Determinants of tax evasion in the developing economies: A structural equation model approach of the case of Ghana

Oduro¹,

Asiedu²,

Tackie³

2018

J. Account. Taxation

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The objective of this paper is to examine the factors that determine whether a tax payer would evade tax. It also seeks to explore the mediating role of tax education in the relationship between traditional, institutional, socio-cultural factors and tax evasion. A cross-sectional survey was used for the study. Using structural equation modelling with bootstrapping analysis, data from a sample of 1,052 tax payers, drawn from different parts of the country, was analysed and the result showed that, traditional factors and institutional factors positively influenced tax evasion; though the strength of the relationship is weak. This relationship was also found to be mediated by tax education as it relate negatively with traditional and institutional factors as well as tax evasion. It was also found that, sociocultural factors such as gender, income level, education and age do not have significant influence on tax evasion. The study concluded that, tax education plays a significant role in reducing the effect of traditional and institutional factors on tax evasion. The study recommended that educating respondents on the need to pay taxes moderate the extent to which increases in tax rates, penalty for tax noncompliance, and audit probability contributes to tax evasion. It was again recommended that, high cost of compliance and high corruption level of tax officials would lead to increase in tax evasion, but intensive tax education mediating the effect of these factors on tax evasion.

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