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Determinants of tax stamp evasion in rural districts in Ghana: A case of Twifu Atti-Morkwa and Hemang Lower Denkyira districts

Stephen Amponsah (Department of Accounting and Finance, Faculty of Business and Law, University of Newcastle, Newcastle, Australia)
Zangina Isshaq (Department of Finance, School of Business, University of Cape Coast, Cape Coast, Ghana)
Daniel Agyapong (Department of Marketing and Supply Chain Management, School of Business, University of Cape Coast, Cape Coast, Ghana)

International Journal of Law and Management

ISSN: 1754-243X

Article publication date: 11 February 2019

460

Abstract

Purpose

The purpose of this study is to examine tax stamp evasion at Twifu Atti-Morkwa and Hemang Lower Denkyira districts in the central region of Ghana.

Design/methodology/approach

A cross-sectional survey design was adopted to sample 305 micro-taxpayers through the use of multi-stage sampling technique. Primary data were collected from the micro-taxpayers using structured interview. Binary and multinomial logit regression models were used to regress the tax stamp evasion on economic and non-economic factors.

Findings

The study found that the likelihood of micro taxpayers to evade tax stamp is predicted by age, application of sanctions, guilt feeling, transportation cost to tax office and rate of tax audit. Thus, the study found partial support for expected utility, planned behaviour and attributory theories in explaining tax evasion behaviour of micro-taxpayers.

Practical/implication

There are several measures of addressing tax evasion behaviour of micro taxpayers. Evasion behaviour can be deterred by enforcement strategies such as application of sanctions and regular tax audit, establishment of more tax offices in the districts and writing normative messages on the faces of tax stamp stickers.

Originality/value

This study helps explains the tax evasion behaviour of micro-taxpayers of a developing economy like Ghana using a special type of tax design meant to capture such taxpayers in the tax bracket. To the best of our knowledge, the study is unique in terms of the means of measuring tax evasion and the methodologies used.

Keywords

Citation

Amponsah, S., Isshaq, Z. and Agyapong, D. (2019), "Determinants of tax stamp evasion in rural districts in Ghana: A case of Twifu Atti-Morkwa and Hemang Lower Denkyira districts", International Journal of Law and Management, Vol. 61 No. 1, pp. 73-90. https://doi.org/10.1108/IJLMA-08-2017-0190

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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