An assessment of income tax compliance of firms in the informal sector in mampong municipal assembly

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August, 2015
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The study looked into the assessment of income tax compliance of firms in the informal sector in Mampong Municipal Assembly. A case study approach was used for the research which employed both quantitative and qualitative methods. Simple random sampling, purposive and stratified sampling techniques were used to select respondents. Two (2) sets of Questionnaires were used for data collection on One Hundred and Three (103) taxpayers and five (5) tax officials in the Mampong Municipality. The study revealed the following: The DTRD of GRA does not apply the approved sanctions, inadequate tax education by DTRD, capacity constraints, lack of logistics, taxpayers inability to file returns annually, high tax rates compliance cost outweighed taxpayers obligations, taxpayers do not understand the procedures in filing tax returns, large size of tax districts and government inability to use tax revenue judiciously. Based on the findings of the study, it was concluded that, there were inefficiencies and deficiencies concerning tax education which has resulted in a greater proportion of the informal sector not complying with the tax laws and also, tax officials faced a lot of challenges in discharging their duties. It was recommended that, regular tax education should be conducted, also, logistical support base must be expanded, tax revenue should be utilized judiciously, taxpayers should be mechanized into a single data base, and sub tax offices should be located at strategic locations.
A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Business Administration (Accounting-Option),