Voluntary and enforced tax compliance determinants and impact among agrochemical businesses in Ghana

Richmond Kumi, Richard Kwasi Bannor, Helena Oppong-Kyeremeh and Jennifer Ellah Adaletey

Arab Gulf Journal of Scientific Research, 2023, vol. 42, issue 3, 991-1011

Abstract: Purpose - This paper examined tax compliance and its impact on agrochemical traders in Ghana. Design/methodology/approach - Based on the registered agrochemical lists obtained from the Plant Protection and Regulatory Service Department, 92 agrochemical traders were sampled for data collection. Probit regression was used to estimate determinants of tax compliance, whereas the Inverse Probability Weighted Regression Adjustment Model was employed to evaluate the impact of tax compliance on business performance. Findings - The results revealed that age and gender relate positively to enforced tax compliance, while education positively impacts voluntary tax compliance. Nonetheless, tax rate, trust and monthly sales positively affect voluntary tax compliance but negatively impact enforced tax compliance. Inversely, while authorities’ power negatively impacted voluntary compliance, it positively influenced enforced tax compliance confirming the Slippery Slope Framework. Originality/value - To the best knowledge of the authors, this paper is the first to investigate tax compliance determinants and impact among agrochemical traders, despite the tremendous growth of the agrochemical sub-sector in Africa and Ghana. Therefore, this study makes a modest contribution to empirical studies that validate the Slippery Slope Framework in promoting tax compliance in the agricultural and agribusiness sectors of a developing country. Similarly, it also unearths the impact of tax compliance on agribusiness growth which has yet to be highlighted in the extant literature.

Keywords: Voluntary compliance; Enforced compliance; Business performance; Tax compliance; Agrochemical traders (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:agjsrp:agjsr-03-2023-0133

DOI: 10.1108/AGJSR-03-2023-0133

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