ABSTRACT:- 

Introduction: The bedrock of most financially sufficient nations hinges on taxation. Unfortunately, Ghana’s Informal SMEs have often popularly known for issues of tax non-compliance resulting in insufficient tax revenue mobilization from the sector operators. Major studies have posited that one of the probable solutions in addressing this issue is tax education, which has the tenacity of raising taxpayer’s comprehension of tax laws, rules, regulations, tax policies, and their obligations. In light of this, the study examined the role of tax education on reporting compliance in Ghana.

Methodology: The Theory of Planned Behaviour (TPB) was the principal theory employed by the study and oriented by a quantitative research method. A descriptive survey design was used and informal sector SMEs within the Greater Accra Region of Ghana were the target population for the study. The selected SMEs are those registered with Ghana Enterprises Agency formally called National Board for Small Scale Industries (NBSSI), a government agency responsible for provision of support and growth to SMEs in Ghana.  Using random and snowballing sampling techniques, 1,152 informal sector SMEs in the Greater Accra Region of Ghana were used by the study. The major variables of the study are tax education (formal, informal and non-formal) and reporting compliance. The study utilized 18-item based questionnaire obtained through literature. Data was analyzed using the partial least squares (PLS) tool through SMART-PLUS software.

Findings: The study found that formal tax education exerts significant positive effect on reporting compliance. In addition, the study discovered that informal tax education exert significant positive effect on reporting compliance. Further, the study found that non-formal tax education exerts significant positive effect on reporting compliance. Importantly, at the combined level tax education exert significant positive effect on reporting compliance.

Conclusion: Tax education plays critical role in shaping compliance with tax laws, policies and requirements of individual tax payers. The study discovered that formal, informal and non-formal tax educational initiatives and strategies all have a significant positive effect on tax reporting compliance. This highlights the importance of diverse, multifaceted educational interventions that address both theoretical and practical aspects of taxation.

Keywords: Tax education, formal tax education, informal tax education, non-formal tax education, compliance, reporting compliance, informal SME sector