EXPLORATORY STUDY OF TAX EVASION

Abstract

Tax is a compulsory payment which the state imposes on individuals, firms and organizations not as a penalty for any offense or immediate exchange of goods, but as income to enable her meet its expenditure. Tax evasion is a deliberate attempt to evade tax, it has a negative effect on economic development. Many developed and developing countries are losing revenue through tax evasion which could have been channeled into infrastructural development. The study was conducted using primary data. Self administered questionnaires and interviews were the tools used to collect data from the respondents from the staff of Ghana Revenue Authority -Domestic Tax Revenue Division (DTRD) and the working populace in the Kumasi Metropolis. In all 65 questionnaires was sent out and 55 was retrieved representing 85% of the respondents. This means the research is fairly represented. SPSS version 17 was used for the data analysis. The study revealed that all the respondents (100%) had knowledge on tax evasion and its effects on national development. They were also of the view that taxes are essential ingredients for national development. But 75% of the respondents said taxes collected are not effectively utilized. They were of the view that improvement on social amenities cannot be felt in each part of Ghana but rather restricted to some few areas which is the reason why some of them would not declare their income to be taxed.