Abstract:
Revenue mobilisation is one of the key activities of every government across the
globe. One of the major means through which governments generate and mobilise
revenue to undertake developmental activities is through taxation. In third world
countries like Ghana, mobilising revenue from the informal sector has become a
burdensome adventure. This is as a result of a large informal sector in place which is
home to most of the economic players. In Ghana, it is estimated that, only 20% of
Ghanaians pay direct income tax which is a very worrying situation. This thesis
therefore, uses the mixed method approach to examine tax mobilisation in the
informal sector in Ghana with Cape Coast as its area of study. The views of 396
respondents from the informal sector were sought using questionnaire as well as 5
elite interviews were conducted. After analysis of the data, the study revealed that,
lack of permanent and visible place of business, poor record keeping practices and
poor accounting practices, high illiteracy rate, lack of motivation and incentive as well
as inadequate revenue collectors affect revenue mobilisation from the informal sector.
Additionally, the study revealed that, individuals would work in the informal sector
because of the low tax rate as compared to the formal sector, cumbersome
bureaucratic procedure in the formal sector compared to the informal sector, high rate
of illiteracy, and inadequate job opportunities in the formal sector. Also, the study
revealed that, the use of ICT tools has a positive correlation with tax mobilisation in
the informal sector. On the basis of the above, the study therefore recommended
motivation for tax collectors to reduce corruption, use of ICT tools to enhance tax
collection, broadening of the tax net, and proper accounting procedures amongst
others as policy actions to be taken to enable more revenues to be generated from the
informal sector.
Description:
A Thesis in the Department of
Political Science Education submitted to the school of
Graduate Studies in partial fulfillment
of the requirements for the award of the degree of
Master of Philosophy
(Political Science)
in the University of Education, Winneba
JUNE, 2023