Abstract:
Transitional economies have challenges with domestic revenue mobilization due to their widespread informal sector. Ghana government introduced tax stamp under the IRS regime as a strategy to optimize revenue generated from the Ghanaian informal economy, 2005. The scheme has undergone review in the corridors of the current GRA all to tighten its coverage belt. This study assesses taxpayers’ perception and noncompliance on the tax stamp scheme. Adopting stratified-random sampling technique on the informal sector operatives, purposive sampling was used to balance the operators’ opinions with tax compliance officials; the research data were obtained through questionnaires and personal interviews. The study unveiled 28% of the sectorial participants contributing their tax quota to the government through the stamp scheme. The leviathan noncompliance at the sector has a strong tire with the lack of taxpayers’ voluntary compliance and perceived unmerited returns with the stamp. Asocial noncompliance offering 79% explanation to the cited reasons of the tax payers and that of ‘Unknown’ were considered the key explanatory variable to the sector’s evasion in the spectrum of the stamp. From the survey, taxpayers perceive that the scheme lacks equity. However, the major challenges defining the dialysis of the stamp ineffective sanction comprises limited staff capacity to patrol the widespread tax zone. The study recommends that government advocate proliferating tax compliance officials and/or provide adequate logistics to smoother the stamp administration at the Ghanaian informal sector.
