Journal of Finance and Accounting
ISSN (Print): 2333-8849 ISSN (Online): 2333-8857 Website: http://www.sciepub.com/journal/jfa Editor-in-chief: Apply for this position
Open Access
Journal Browser
Go
Journal of Finance and Accounting. 2014, 2(1), 1-7
DOI: 10.12691/jfa-2-1-1
Open AccessArticle

Gift Tax Compliance in Ghana, an Empirical Study

Ernest Bruce-Twum1,

1Central Business School – Ghana, P. O. Box AN, Accra-North

Pub. Date: January 19, 2014

Cite this paper:
Ernest Bruce-Twum. Gift Tax Compliance in Ghana, an Empirical Study. Journal of Finance and Accounting. 2014; 2(1):1-7. doi: 10.12691/jfa-2-1-1

Abstract

This paper seeks to determine the extent of knowledge about gift tax in Ghana using the Accra-Tema Metropolis as a sample population. It further seeks to ascertain the extent of compliance with Gift Tax in Ghana. If the level of compliance is low, then to find out reasons for non compliance in order to ascertain the applicability of Fischer’s tax compliance model in Ghana. Finally, the paper aims at contributing to the very scanty literature on tax compliance in Ghana. In order to achieve the above objective, the researcher used a direct method of measuring tax compliance, which involves the use of direct surveys of taxpayer behavior. Furthermore, a cross sectional data on individual tax returns filed for the years of assessment 2009 to 2012 was also used. The results indicate a very low awareness rate of Gift Tax; consequently, the compliance rate is also very low. The respondents cited lack of knowledge as the main reason for failing to comply with the tax. Educational level and the low detection rate were the other principal factors cited for non-compliance. The Fischer tax compliance model was thus accepted as explaining the non compliance nature.

Keywords:
Gift tax Ghana compliance

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]  Akakpo K.A.V (2006).Principles Of Taxation, Based on the IRS Act 2000 (ACT 592), Ghana.
 
[2]  Andreoni J, Erard B, Feinstein J (1998). Tax Compliance, J. Econ. Literature, 36: 818-860.
 
[3]  Ali-Nakyea A. (2008). Taxation in Ghana, Principles, Practice and Planning 2nd Edition; Page 141-161.
 
[4]  Alm J (1991). A Perspective on the Experimental Analysis of Taxpayer Reporting, 66 (3) Accounting Review 577.
 
[5]  Ali M. M, Cecil H.W, Knoblett, J. A (2001).The Effects of Tax Rate and Enforcement Policies on Taxpayer Compliance: A Study of Self-Employed Taxpayers 29 (2) Atlantic Economic Journal 186.
 
[6]  Andreoni J, Erard B, Feinstein J (1998). Tax Compliance Journal of Economic Litterature, Vol 36, No. 2 June, 1998.
 
[7]  Aamresh B. (1995): Strengthening Direct Taxes. Some Suggestions Economic and Political Weekly, Vol. 30, No. 7/8, pp. 380-384.
 
[8]  Apreku E.D., Kwakye G.A. (2010). Critical Assessment of Tax collection in Ghana, (Internal Revenue Service – IRS).
 
[9]  Bruce G. L. (1997). Income Tax Compliance and Evasion: A Graphical Approach; Southern Economic Journal, Vol. 63, No. 3, pp. 788-796.
 
[10]  Bird R.M, Zolt E. (2003). Introduction to Tax Policy Design and Development; Notes for a course on Practical Issues of Tax Policy in Developing Countries, World Bank.
 
[11]  Chau G., Leung P. (2009). A critical review of Fischer tax compliance model: A research synthesis; Journal of Accounting and Taxation Vol.1 (2), pp. 034-040.
 
[12]  Clotfelter, C. T. (1983). ‘Tax Evasion and Tax Rates: An Analysis of Individual Returns’; August LXV (3) Review of Economics and Statistics 363.
 
[13]  Edling H, Nguyen-Thanh D (2006). Taxes and Culture Tax Reforms for Sustainable Development”. Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ).
 
[14]  Fischer CM, Wartick M, Mark M (1992). Detection Probability and Taxpayer Compliance: A Review of the Literature. J. Acc. Lit. 11: 1-46.
 
[15]  Fjeldstad OH, Semboja J (2001). Why People Pay Taxes: The Case of the Development Levy in Tanzania. World Dev. 29: 2059-2074.
 
[16]  Gatsi J. G, Acquah S. I, (2010). Information Asymmetry and Gift Tax in Ghana.
 
[17]  Groenland E, Veldhoven GM (1983). Tax Evasion Behavior: A Psychological Framework. J. Econ. Psychol. 3: 129-144.
 
[18]  Internal Revenue Service Act, 2000 (Act 592).
 
[19]  Jackson BR, Jaouen PR (1989). Influencing Taxpayer Compliance Through Sanction Threat or Appeals to Conscience. Adv. Taxation, 2: 131-147.
 
[20]  Jackson BR, Milliron VC (1986). Tax Compliance Research: Findings,Problems, and Prospects, J. Account. Lit. 5: 125-165.
 
[21]  Joel Slemrod (1985). An Empirical Test for Tax Evasion; The Review of Economics and Statistics, Vol. 67, No. 2, pp. 232-238.
 
[22]  Kusi N.K. (1998). ‘Tax Reform and Revenue Productivity in Ghana’, AERC Research Paper 74 (March), Nairobi: African Economic Research Consortium.
 
[23]  Kulsrud N.W, Pratt W.J. (1997). Individual Taxation 10th ed.; Irwin Inc.USA.
 
[24]  Massimo B (1993). A Fairness Approach to Income Tax Evasion. J.Public Econ. 52: 345-362.
 
[25]  Melville A. (2005). Taxation, Finance Act 2004.10th ed.; Pearson Education Ltd.UK.
 
[26]  Poterba J. M. (1987). Tax Evasion and Capital Gains Taxation;The American Economic Review, Vol. 77, No. 2, Papers and Proceedings of the Ninety-Ninth Annual Meeting of the American Economic Association (May, 1987).
 
[27]  Richardson G (2006). Determinants of tax evasion: a cross-country investigation. J. Int. Acc. Auditing Taxation, 15: 150-169.
 
[28]  Song YD, Yarbrough TE (1978).Tax Ethics and Taxpayer Attitude: A Survey Public Administration Review September-October: 442-452.
 
[29]  Sutherland E. (1949) White Collar Crime New York: Dryden.
 
[30]  Tanzi, Vito (pre-1986).The underground economy; Finance & Development Dec 1983; 20, 000004; ABI/INFORM Global.
 
[31]  The State of the Ghanaian Economy in 2009; Institute of Statistical, Social and Economic Research, University of Ghana, Legon.
 
[32]  Vogel J (1974). Taxation and Public Opinion in Sweden: an Interpretation of Recent Survey Data. Natl. Tax J. 27: 499-513.
 
[33]  Vito T, Parthasarathi S. (1993).A Primer on Tax Evasion; Staff Papers - International Monetary Fund, Vol. 40, No. 4 (Dec., 1993), pp. 807-828.
 
[34]  Werner W. P, Hannelore H. (1996).Tax Rates, Tax Administration and Income Tax Evasion in Switzerland; Public Choice, Vol. 88, No. 1/2 (Jul., 1996), pp. 161-170.