Tax Education and Tax Compliance of Informal SMEs: Evidence from Ghana
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ABSTRACT: The study examines the relationship between tax education and tax compliance of informal SMEs in Ghana. Three indicators namely formal tax education, informal tax education, and non-formal tax education are used as proxies for tax education. The study employs the quantitative research approach and cross-sectional survey design. The population is all informal SMEs in Ghana. The study uses convenience sampling to select 900 respondents. Primary data are obtained and analyzed using the SPSS software. Multiple regression analysis (OLS regression) is employed to test the relationship. The study finds that all the indicators of tax education, namely, formal tax education, informal tax education, and non-formal tax education have significant positive impact on tax compliance. The study suggests policy makers and tax managers make tax education convenient for taxpayers while also liaising with educational stakeholders to incorporate tax education in educational curriculum to deepen tax knowledge of the people.
KEYWORDS: Tax education, Tax compliance, Formal tax education, Informal tax education, Non-formal tax education, Informal SMEs.