TAXATION OF THE INFORMAL SECTOR IN GHANA: A CRITICAL EXAMINATION

TAXATION OF THE INFORMAL SECTOR IN GHANA: A CRITICAL EXAMINATION

ABSTRACT
The United Nations Organization has realized the need for every nation across the globe
to develop using its own resources. The Millennium Development Goals is a key scheme of the
United Nations to empower all nations to develop using their own resources. The scheme aims at
assisting nations to realize potential areas of the economy from which revenue can be generated for
national development.
National revenue is raised through various ways. These include direct taxes, indirect
taxes, royalties, etc. Both the formal and informal sectors of the economy contribute in mobilizing
revenue for national development. While the formal sector is well structured to prevent evasion of
taxes, the informal sector is not well organized. Various researchers have observed that the
revenue generated from the informal sector in Ghana has not been the best.
In critically examining reasons why the informal sector is hard-to- tax, the researcher
used Accra, Tema, Ho and adjoining communities with a sample size of 200 informal sector
operators. Primary data was mainly used with mostly closed –ended questions and multiple
answers provided to limit respondents to choices to select from.
Analysis of data collected established that the factors that make the informal sector
hard-to-tax were very high in Ghana as a result of the predominance of cash transactions, poor
record keeping, high illiteracy rate, little or no barriers to entry, lack of laid down procedures,
ignorance of tax laws and the peripatetic nature of the informal sector in Ghana.
The recommendations of the study included, capacity building, tax information and
education, simplicification of filing procedures, improving tax administration and preparing a
master list of informal businesses.
It is the hope of the researcher that his findings would contribute to mobilizing revenue
from the informal sector in Ghana for national development.

TABLE OF CONTENT

Title page- – – – – – – – – i
Approval page – – – – – – – -ii
Dedication – – – – – – – – -iii
Acknowledgement – – – – – – – -iv
Abstract – – – – – – – – – -v
Table of content – – – – – – – -vi

CHAPTER ONE
INTRODUCTION – – – – – – – -1
1.0 Background of the study – – – – -1
1.1 Statement of the problem – – – – -5
1.2 Purpose of the study – – – – – -6
1.3 Significance of the study – – – – -8
1.4 Research questions – – – – – -9
1.5 Scope of the study – – – – – – -10

CHAPTER TWO

LITERATURE REVIEW – – – – – – -11

CHAPTER THREE

Research methodology – – – – – – -39
Design of study – – – – – – – -40

CHAPTER FOUR

Presentation, analysis and interpretation of data – -48

CHAPTER FIVE

Summary of findings – – – – – – -60
Conclusion – – – – – – – – -61
Recommendations – – – – – – – -62
Suggestions for further research – – – – -64
References – – – – – – – – -65
Appendix I – – – – — – – – -68
Questionnaire. – – – – – – – -69