Examining the Determinants of Tax Compliance Intention among the Self-Employed in Ghana

Abstract

Empirically, studies on tax compliance have often focused on tax evasion, especially from the firm level perspective. This study, however, provides evidence on tax compliance from an individual viewpoint. Relying on the Extended Theory of Planned Behaviour, the study examines the impact of Attitude, Subjective norms, Perceived behavioural control, Moral obligation, Perceived tax complexity and Antecedent-based intervention strategies on tax compliance intention. Additionally, the study examines if the trust of individuals in the tax system affects their intents to be tax compliant. Adopting a survey method of research, a set of questionnaires were designed and administered to self-employed individuals in Ghana. Out of 750 questionnaires administered, 725 were used for the study analysis by means of a structural model analysis using the Partial Least Square based Structural Equation Modelling technique. Results of the study suggest that self-employed individuals generally have the intention to be tax compliant. The study also demonstrates that some antecedent-based intervention strategies influence individuals to comply by default. Notwithstanding, the degree to which an individual will comply depends, to a large extent, on the person’s level of trust in the tax system and authority. The findings of the study make significant contributions to the tax compliance discourse by providing new awareness on the determinants of self-employed individuals’ tax compliance intention, an area that has received little attention by researchers. Theoretically, findings of the study provide empirical support for the inclusion of the constructs trust, perceived tax complexity and antecedent-based intervention strategies as key predictors of tax compliance intentions. The findings of this study provide discerning implications to all taxpayers, entrepreneurs and policy makers in enhancing tax compliance in Ghana. To researchers, the study makes insightful recommendations on conducting similar studies to enrich the tax compliance discourse.