Tax equity perceptions, compliance intention and compliance behaviour among small and medium enterprises in Ghana.

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This study aimed to examine the influence of tax equity perceptions (vertical, horizontal and exchange) on compliance behaviour among small and medium enterprises in Ghana. Also, the mediation and moderation role of compliance intention and tax knowledge on the relationship between tax equity and compliance behaviour was respectively examined in this study. In addition, the study looked at other motivators of tax compliance besides tax equity perceptions. A sequential explanatory mixed-methods approach was employed for this study. Data was collected through questionnaire surveys and complemented with focus group interviews from small and medium enterprises. A multi-stage sampling technique involving probability and non-probability sampling was implored for the study. Nine (9) focus groups, using quota sampling, were engaged for the qualitative sample and 391 small and medium enterprises for the quantitative sample. The study found a direct positive and statistically insignificant relationship between all three equity dimensions (vertical, horizontal and exchange) and compliance behaviour. However, the study found no mediation role of compliance intention but found a statistically significant moderation effect of tax knowledge on the relationship between tax equity and compliance behaviour. For the other motivators of tax compliance, the study found a positive and statistically significant relationship between economic, institutional and social motivators and compliance behaviour. However, the relationship between individual motivators and compliance behaviour was positive but statistically insignificant. The study objectives were analysed with smart partial least squares structural equation model version 3, while the focus group interviews/discussions were transcribed for the qualitative phase. This study is aligned with previous studies and offers theoretical insights into the tax equity and compliance framework. This scholarly work would aid policymakers, academic institutions and the understanding of small and medium enterprises and the general public. More specifically, government borrowings would be reduced, and tax revenue would be increased when an equitable and fair tax system is implemented. Tax authorities and future researchers should examine the role that media and opinion leaders play in promoting voluntary tax compliance behaviour.


Doctoral Degree. University of KwaZulu-Natal, Durban.