THE IMPACT ON BUSINESS REGISTRATION ON REGULATORY COMPLIANCE: A CASE STURDY OF SMEs IN THE KUMASI METROPOLIS

Abstract

ABSTRACT The main objective of the study is to assess the impact of business registration on regulatory compliance. In developing countries, Tax compliance is currently a topical policy issue, as governments are seeking ways to improve efficiency in tax revenue collection to finance their budgets. The study used a sample of 302 responses; all three hundred and two (302) responses of questionnaire were completed and collected representing 100% of responses. Reliability analysis was done using the Cronbach Alpha with Business Registration 0.898, Perception on Business Registration 0.927, Challenges with Tax and SSF Payment 0.886, Compliance 0.515 to measure reliability of the variables. Linear regression was used to assess the relationship between business registration and regulatory compliance. Frequencies were used to examine the perception of business owners on business registration and 240 (79.5%) respondents said yes whereas 62(20.5%) of respondents said no respectively, challenges business owners face in paying tax and paying SSF or employee and 256 (84.8%) respondents said yes whereas 46(15.2%) of respondents said no respectively. Findings of the study showed that the perception of business owners in registration of business based on activities outlined constituted expensive and complex. Again, the challenges business owners face in paying taxes (79.5%) was high and challenges face in paying ssf for employees (84.8%) was very high. In addition, the study found that Business registration (β1 = 0.496, t = 9.755, p = 0.000). The study recommended that; Policy makers like SSNIT, GRA and Register General could make flow of information and assess to training of businesses increase. A lot more decrease in processes for registration, filling tax returns and calculations on SSNIT for employers who would be much more burdensome for businesses. Limitations of the study were; Lack of trained interviewer to clarify and probe can possibly lead to less reliable data. The study is based on limited sample.