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State legitimacy and tax compliance among small and medium scale enterprises: a case study of Dodowa district, Ghana

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  • Abraham Gyamfi Ababio
  • Arthur Gnonsio Mangueye

Abstract

Purpose - Improving tax compliance would drive the needed development in Ghana. Small and medium scale enterprises (SME) constitute a sizable proportion of the Ghanaian economy but its contribution to tax revenue is below expectation. This study aims to determine whether SME's perception of state legitimacy affects tax compliance. Design/methodology/approach - A structured questionnaire was administered to 200 SMEs randomly drawn from Dodowa in the Shai-Osudoku District of Greater Accra Region. Descriptive statistics and the Probit model with sample selection were used to analyse the data. Findings - The study found that SME's perception of government legitimacy exerts a significant negative effect on reducing profit to avoid tax liability (ß= −0.0305,p

Suggested Citation

  • Abraham Gyamfi Ababio & Arthur Gnonsio Mangueye, 2021. "State legitimacy and tax compliance among small and medium scale enterprises: a case study of Dodowa district, Ghana," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 28(3), pages 858-869, July.
    • Handle: RePEc:eme:jfcpps:jfc-09-2020-0195
    DOI: 10.1108/JFC-09-2020-0195
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