Determinants of tax stamp evasion in rural districts in Ghana

Abstract

Purpose The purpose of this study is to examine tax stamp evasion at Twifu Atti-Morkwa and Hemang Lower Denkyira districts in the central region of Ghana. Design/methodology/approach A cross-sectional survey design was adopted to sample 305 micro-taxpayers through the use of multi-stage sampling technique. Primary data were collected from the micro-taxpayers using structured interview. Binary and multinomial logit regression models were used to regress the tax stamp evasion on economic and non-economic factors. Findings The study found that the likelihood of micro taxpayers to evade tax stamp is predicted by age, application of sanctions, guilt feeling, transportation cost to tax office and rate of tax audit. Thus, the study found partial support for expected utility, planned behaviour and attributory theories in explaining tax evasion behaviour of micro-taxpayers. Practical/implication There are several measures of addressing tax evasion behaviour of micro taxpayers. Evasion behaviour can be deterred by enforcement strategies such as application of sanctions and regular tax audit, establishment of more tax offices in the districts and writing normative messages on the faces of tax stamp stickers. Originality/value This study helps explains the tax evasion behaviour of micro-taxpayers of a developing economy like Ghana using a special type of tax design meant to capture such taxpayers in the tax bracket. To the best of our knowledge, the study is unique in terms of the means of measuring tax evasion and the methodologies used.

Understanding Sustainable Modern Tax Compliance Approach to Prevent Sanctions From Tax Authorities in Nigeria

“…We found out that knowledge of tax sanctions and succession planning is how leaders in the manufacturing companies understand the drivers of tax evasion, which may prevent sanctions from tax authorities in Lagos State, Nigeria. The fifth theme on knowledge of tax sanction aligns with previous literature (Amponsah et al, 2019). Amponsah et al (2019) discovered that age, the application of sanctions, guilt feelings, transportation costs to the tax office, and the rate of tax audit all indicate whether micro taxpayers will avoid tax stamps.…”

“…Amponsah et al (2019) discovered that age, the application of sanctions, guilt feelings, transportation costs to the tax office, and the rate of tax audit all indicate whether micro taxpayers will avoid tax stamps. As a result, the study revealed some evidence for expected utility, planned behavior, and attributory theories in understanding micro-taxpayer tax evasion behavior (Amponsah et al, 2019).…”

The Impact of the Size of Enterprises on Tax Evasion in the Forestry Industry of Russia

“…Amponsah et al [22] conducted a cross-sectional survey of 305 micro-taxpayers by using structured interviews and showed that the likelihood of a taxpayer to evade tax stamp is predicted by such parameters as the age, application of sanctions, guilt feeling, transportation costs and the frequency of tax audits.…”

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“…Developing policies and strategies to combat tax evasion has thus been an important priority for governments around the world (Boolaky et al, 2018;Andoh et al, 2019). Typically these strategies involve attempts to improve the ability of tax authorities to discover tax evasion attempts (Peprah et al, 2020), increasing the severity of penalties for entities caught and convicted of evading taxes (Chiarini & Marzano, 2019) and attempts to improve voluntary tax compliance by citizens by increasing their tax knowledge and convincing them of the societal benefit of paying taxes (Amponsah et al, 2019).…”