Tax equity perceptions, compliance intention and compliance behaviour among small and medium enterprises in Ghana.
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Date
2023
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Abstract
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.
Description
Doctoral Degree. University of KwaZulu-Natal, Durban.