Correlates of tax registration compliance among self-employed in Denkyira corridor of Ghana

Abstract

Purpose This paper aims to investigate the correlates of tax registration among self-employed in Upper Denkyira East municipal and Upper Denkyira West district in Ghana. Design/methodology/approach In all, 783 self-employed were interviewed and discriminant analysis was used to examine the factors that influence a self-employed person’s decision to register with Ghana Revenue Authority. Findings The study found that, age of the self-employed, number of times tax officers visit and inspect self-employed, experience in business, number of years of schooling, distance to tax office and estimated annual profit are important discriminants of tax registration compliance. Originality/value Tax registration is the fundamental element of tax compliance since any effort to exact compliance from taxpayers begins with registration with the tax authority. However, previous studies in the Ghanaian informal sector such as Baba (2010), Baba and Asante (2012) and Razak and Adafula (2013) have focused mainly on aggregate tax compliance (registration, filing, reporting and payment combined) without given specific attention to this fundamental component of tax compliance risk. Therefore, this study seeks to address the gap in the literature.