An Assessment of Tax Compliance Level of Small Enterprises in Ghana

In the wake of fiscal consolidation and the quest to maximise government revenue for economic development, it is vital to assess the tax compliance level of firms. An understanding of the behaviour and compliance level of businesses provides important policy implications for tax reformations and revenue mobilisation. This paper assesses the tax compliance level of small businesses in the Sunyani Municipality. The study uses a total sample size of 500 small businesses. Using Probit regression models, our findings show that lack of tax education, computational issues and lack of book keeping negatively influence the level of tax compliance amongst small businesses in Ghana.  The results also show that age, duration of business operations, liability assessment and business incorporation are important factors that influence tax compliance among small businesses.  We conclude that continuous tax education at the local level would improve small businesses tax compliance level in Ghana. Keywords : Ghana; Sunyani Municipality; Taxation; Tax compliance; Tax education