Strengthening Domestic Revenue Mobilisation Beyond Aid: The Willingness of Informal Sector to Pay Taxes in Ghana
Adaletey, Jennifer E. *
Department of Accounting and Finance, Ho Technical University, Ghana.
Zotorvie, Justice S. T.
Department of Accounting and Finance, Ho Technical University, Ghana.
Kudo, Mathew B
Department of Accounting and Finance, Ho Technical University, Ghana.
Achiyaale, Raymond A
Department of Accounting and Finance, Ho Technical University, Ghana.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study examines the willingness of informal sector workers in Ghana to pay taxes within the context of the Ghana Beyond Aid (GBA) agenda. It further assesses how interpretations of the GBA policy, perceptions of tax fairness, and tax education influence tax compliance behaviour within the informal economy.
Study Design: A descriptive, quantitative cross-sectional survey design was employed.
Place and Duration of Study: The study was carried out among informal sector workers in the Ho Municipality between January 2024 and June 2024.
Methodology: A structured questionnaire was administered to a sample of 100 informal sector workers, selected through convenience sampling. Items were measured using five-point Likert scales. Data were coded and analysed using SPSS to generate descriptive statistics, Pearson correlation coefficients, and multiple linear regression results.
Results: Respondents demonstrated a high willingness to pay tax (M = 4.20, SD = 0.85) and strong positive perceptions of tax fairness (M = 4.51, SD = 0.921). Awareness of the GBA policy was moderately high (M = 3.96, SD = 1.24), while tax education recorded a mean of 3.20 (SD = 1.39). Correlation coefficients showed weak associations between the independent variables and willingness to pay tax (R-values from –0.080 to 0.064). Regression analysis revealed that the model accounted for 2.1% of the variance in willingness to pay (R² = 0.021), and none of the predictors GBA awareness (β = 0.106, p = 0.257), tax fairness (β = –0.150, p = 0.287), or tax education (β = –0.038, p = 0.519) were statistically significant. However, descriptive trends showed higher willingness to pay tax when respondents perceived fairness and received adequate tax education.
Conclusion: Informal sector workers are willing to comply with tax obligations when they understand national policy objectives and perceive the tax system as fair.
Implications: Strengthening transparency, fairness, and public communication around tax revenue use is essential for broadening Ghana’s tax base and supporting the Ghana Beyond Aid agenda.
Recommendations: The study recommends intensified tax education targeted at the informal sector, improved fairness in tax administration, and enhanced visibility of how tax revenues are utilized to foster trust and voluntary compliance.
Keywords: Ghana-beyond-aid, tax compliance, willingness to pay, tax education, domestic revenue mobilization