Investigating small business operators’ views on taxation of business income: A novel analysis from cape coast metropolis in Ghana

Abstract

Tax evasion poses a significant task for governments and tax officials in many African nations, including Ghana. Small and medium-sized enterprises (SMEs) play a vigorous role in the national economy by substantially contributing to tax revenue. This paper implemented a descriptive research survey design, gathering primary data through structured questionnaires and employing a quantitative approach. Data analysis was conducted using SPSS Version 22.0, with inferential statistics (standard multiple regressions, Pearson correlation) and descriptive statistics (mean, standard deviation, frequency, percentage) to derive insights. A survey conducted in Cape Coast Metropolis with 120 participants revealed three key factors influencing tax compliance: tax awareness, observations of government spending, and the likelihood of audits. Among these, tax knowledge greatly impacted the government's revenue generation capacity. The paper recommends that the Ghana Revenue Authority (GRA) perform regular, fair audits to ensure compliance among SMEs. Additionally, GRA must host frequent seminars and conferences to educate SMEs on the importance of tax compliance and motivate them to fulfill their tax obligations.