Perceptions of self-employed micro, small, and medium-scale enterprises (MSME) taxpayers on tax stamp compliance in Ghana

What the paper says

This study explores the determinants of tax stamp compliance among self-employed micro, small, and medium-scale enterprises (MSMEs) in Ghana’s informal sector, a domain historically underrepresented in empirical tax compliance literature. Anchored in an integrative multi-theoretical framework, comprising the Theory of Planned Behaviour, Fiscal Psychological Theory, Socio-Economic Theory, Institutional Quality and Trust Theory, and Political Retribution Theory, the study uses data from 7,673 purposively selected MSMEs across all 16 administrative regions. Employing Robust Least Squares and Generalised Linear Models, the analysis reveals that age and business experience are positively associated with compliance, whereas being female and higher educational attainment are inversely related. Contrary to conventional wisdom, MSMEs that maintain accounting records exhibit lower compliance, signalling possible self-selection into higher regulatory tiers. Furthermore, positive taxpayer perceptions, enhanced tax education, and participation in real sector activities significantly increase compliance, while perceived high tax burdens and political partisanship reduce it. The study makes three novel contributions to knowledge. First, it introduces and empirically validates the Political Retribution Theory as a behavioural lens for understanding tax compliance in politically sensitive contexts. Second, it reconceptualises tax compliance as a function of both formal recordkeeping and political affiliation, revealing latent trade-offs between administrative capacity and regulatory engagement. Third, the study offers rare large-sample empirical evidence on tax stamp dynamics in Ghana, thus filling a critical geographic and policy void. The findings provide actionable insights for tax administrators, policymakers, and development practitioners. Key recommendations include demystifying the tax system through targeted education, institutionalising equity in tax enforcement, and mitigating the politicisation of tax policy. Ultimately, this study provides a multidimensional, evidence-based foundation for strengthening domestic revenue mobilisation through inclusive informal-sector tax policy reform.   Keywords: Ghana, micro, small, and medium-scale enterprises (MSMEs), partisanship, political retribution theory, perception, tax compliance, tax stamp system.