Browsing by Author "Okine, Benedict Nii Ayi"

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    Tax evasion in the informal sector in the Kumasi Metropolis
    (KNUST, 2016-08) Okine, Benedict Nii Ayi
    This study focused on tax evasion in the informal sector of Ghana. Specifically, it addresses the taxpayer’s understanding of the tax system, the causes of tax evasion and factors that militate against effective tax collection. Questionnaires were therefore administered to the people engaged in informal sector activities in selected markets in the Kumasi metropolis. A total of 200 sample respondents which consists of 65 sellers from Central market, 40 sellers from Suame market, 20 sellers from Bantama market, 30 sellers from Asafo market, 10 sellers from Atonsu market and 35 sellers from the Kejetia market were selected by a two-stage cluster sampling method. In the first stage, the clusters selected were Central market, Suame market, Bantama market, Asafo market, Atonsu market and Kejetia market. In the second stage, convenience sampling was then used separately to select the needed sample from each cluster. Interview guide was also used to elicit information from one of the district heads of Ghana Revenue Authority in Kumasi. The study revealed that the majority of the populace engaged in the informal sector business has a fair knowledge of the tax system in Ghana. It came out that the majority of the respondents were unaware of any tax apart from income tax. Respondents indicated that high tax rate, mismanagement of tax revenues and inflation are some of the causes of tax evasion. The study revealed that there is no formalized system to identify, assess and collect tax from each taxpayer. It was also revealed that relocation of traders makes it difficult to trace and assess them as expected. It is therefore recommended that people who engage in the informal sector activities be educated on Ghana’s tax system. It is also recommended that the Ghana Revenue Authority (GRA) should formalize the tax collection system by registering and educating them, particularly through the use of a public address system on a routine basis to enhance compliance. GRA should liaise with the Kumasi Metropolitan Assembly to provide statistics of all registered traders within the informal sector in the Kumasi Metropolis and encourage unregistered traders in the sector to do so.