An assessment of tax compliance by the Self-employed in the New Juaben Municipality

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Government needs funds to provide social amenities and infrastructures, among other things, for its citizenry and ensuring good governance. It is mandatory for every resident of Ghana to pay a fraction of his or her incomes to the state in a form of tax. (IRS Act 2000, Act 592). In undertaking a study of this nature there was the need to choose a reasonable number of tax payers (self employed) to form the target population so as a concise research could be carried out with reasonable probability of success. In view of this, the researcher chose two hundred and seventy (270) self-employed persons. The researcher used the stratified random sampling methods in administering the questionnaires. Due to the fact that there are so many self employed individuals across the various occupational divide ranging from artisans to traders, and used his personal judgement to select Auto Mechanics, Carpenters and Joiners and Masons for data collection. Self –employed have improved in their tax payment because most literatures on taxing informal sector have shown otherwise. Again the self employed do not attend seminars organized by the Domestic Revenue Service, although those who attend the seminars said it was beneficial and educative which improved their knowledge base on the need to comply with their tax obligation. Finally the self-employed believed their tax liabilities were too high for them to fulfil as they want to comply with their tax obligation. From the research conducted, it can be decisively concluded that the level of income tax compliance in the informal sector is not satisfactory. It is therefore recommended that the IRS educate the public on understanding the tax system, the basis of computing their tax liability and more importantly the need to pay income tax for national growth and development among other things so as to ensure full understanding of the tax system by the self employed.
A Thesis submitted to the Department of Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Commonwealth Executive Masters in Business Administration