State legitimacy and tax compliance among small and medium scale enterprises: a case study of Dodowa district, Ghana

Abraham Gyamfi Ababio and Arthur Gnonsio Mangueye

Journal of Financial Crime, 2021, vol. 28, issue 3, 858-869

Abstract: Purpose - Improving tax compliance would drive the needed development in Ghana. Small and medium scale enterprises (SME) constitute a sizable proportion of the Ghanaian economy but its contribution to tax revenue is below expectation. This study aims to determine whether SME's perception of state legitimacy affects tax compliance. Design/methodology/approach - A structured questionnaire was administered to 200 SMEs randomly drawn from Dodowa in the Shai-Osudoku District of Greater Accra Region. Descriptive statistics and the Probit model with sample selection were used to analyse the data. Findings - The study found that SME's perception of government legitimacy exerts a significant negative effect on reducing profit to avoid tax liability (ß= −0.0305,p

Keywords: Tax compliance; State legitimacy; Probit model with sample selection; Public services and facilities; Small and medium scale enterprises (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-09-2020-0195

DOI: 10.1108/JFC-09-2020-0195

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