Registration of business and tax payment in Nkoranza North and South districts in Brong Ahafo region of Ghana

Abstract

Purpose

This paper aims to examine the relationship between registration of business and tax payment among micro-business owners in Nkoranza South Municipal and Nkoranza North District in Ghana.

Design/methodology/approach

Interview schedule was used to collect information from 720 micro business owners who qualify for tax stamps. The study used correspondence analysis as the analytical tool.

Findings

The study found a significant association between registration of business and tax payment. The biplot also indicated that unregistered businesses and businesses registered with District Assembly only are more likely to evade tax than those registered with Ghana Revenue Authority.

Originality/value

In Ghana, for instance, owner of business is required by law to provide information on his/her business, himself/herself and partners (as the case may be) to the Registrar-General Department, and thereafter, the business should also be registered at the nearest Ghana Revenue Authority District Office. This regulation was enacted in 2005, and it is expected that this registration will help tax authority in tax collection, as they will have adequate knowledge about businesses in the area including the location of the businesses. However, after 10 years in existence of this regulation, the effect of this registration requirement on tax payment in Ghana is not known. It is this gap that the present study seeks to fill by looking at the relationship between registration of business and tax evasion in the Ghanaian informal sector.

Citation

Adu, K.O. and Amponsah, S. (2017), "Registration of business and tax payment in Nkoranza North and South districts in Brong Ahafo region of Ghana", International Journal of Law and Management, Vol. 59 No. 6, pp. 1181-1189. https://doi.org/10.1108/IJLMA-07-2016-0065