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  2. Vol 2 Issue 3, 2020
  3. IMPROVED TAX ADMINISTRATION AND TAX COMPLIANCE: THE CASE OF VALUE ADDED TAX, GHANA
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BRIDGET ZIEMA

IMPROVED TAX ADMINISTRATION AND TAX COMPLIANCE: THE CASE OF VALUE ADDED TAX, GHANA

This study sought to provide an empirical evidence on how the improved tax administration and improved tax processes have affected tax compliance and revenue mobilization in the Sunyani Tax District. Mixed research design was adopted in which purposive and quota sampling techniques were employed to select 15 GRA tax office staff (Revenue Collectors) and 152 VAT registered members. The results of the data analysed showed that high tax rate, business non-profitability, low integrity of tax officials, low educational level on the tax system, and distance to pay taxes contributed significantly to tax non-compliance. This shows that non-compliance of tax payments is an urgent issue in Ghana, as the government has been suffering from a widening fiscal deficit and a rising debt burden. However, the study found that improved tax administration has significant impact on tax compliance. The regression result showing the effects of improved tax administration on tax compliance was also significant. A strong positive relationship was observed between digitization of tax administration and revenue mobilisation of GRA over the past five (5) years. The study further observed that the challenges of the improved tax administration system were in two-folds: those from taxpayers and those from tax authorities. Each of these challenges has its underlying cause which were also in two-folds. The researcher recommends among others that: GRA should organize workshops for businesses to train tax subjects on the need to pay their taxes and keep proper records of their transactions, and increasing the rate of audits of businesses. Appropriate reviews of tax processes should be integrated into the entire tax system to encourage taxpayers’ compliance.