Assessing tax compliance among small business income earners in the Suame magazine industrial area in the Kumasi metropolis

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This study examined tax compliance of small scale business in the Suame Magazine Industrial Area (SMID) in the Kumasi Metropolis of Ghana. The study specifically sought to determine the attitudes and knowledge of Small Business Income Earners (SBIE) towards tax compliance determine the level of compliance and identify the challenges of complying with tax regulations SBIE in the area. The study employed a qualitative research design because of its appropriateness in understanding and explaining attitudes of people. Small Scale Business Income Earners in the form of hairdressers, provision shop keepers, food vendors, petty traders and many others within the SMIA formed the study population. A sample size of 137 was chosen out of a sample frame of 208 registered SBIE in the SMIA. The study has revealed that, SBIE usually register with authorities but do not declare their incomes. SBIE barely understand the tax system in the country. They do not know much about the income tax laws and regulations and computing of tax liabilities is always difficult for them. The study has also revealed that, SBIE in the area have negative attitude towards the Ghanaian tax system. In order to improve tax compliance among SBIE, it is recommended that, the Ghana Revenue authority should reduce the inconveniences and obstacles in the tax registration process, and that, the general public should also be educated on tax regulations in the country, and that organizational tax educational programmes should also be organized for SME mangers and that there is also the need for adequate training of tax collectors to improve their efficiency and effectiveness in tax collection.
Thesis submitted to the School of Business, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Business Administration (Finance) ,