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n African Journal of Business and Economic Research - Business environment and firms’ decisions to evade taxes : evidence from Ghana

Volume 14 Number 1
  • ISSN : 1750-4554
  • E-ISSN: 1750-4562
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Abstract

This paper sought to identify the effect of business environment on firms’ decisions to evade taxes in Ghana. Employing the Tobit method of estimation on World Bank Enterprise Survey data, the results revealed that business environment affects firms’ tax evasion decisions. In specifics, corruption of tax officials and public infrastructure (electricity outage) has a positive effect on tax evasion while quality of legal environment has a negative effect on firms’ decisions to evade taxes. Also, the results indicated that the type of firm, age and sex of the owner affects tax evasion decisions. Finally, business constraints in the form of tax rate, access to business license and transport has positive effect on firms’ tax evasion decisions. The paper recommends the need to improve the business environment to boost firms’ growth while reducing tax evasion.

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/content/journal/10520/EJC-149c19e2ff
2019-03-01
2019-07-17

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