Published on August 2021 | Social Sciences

TAX RISES IMPACT ON THE SPENDING PATTERN OF THE POPULATION IN GREATER ACCRA REGION OF GHANA
Authors: Justice Agyei Ampofo, Isaac Mantey, Abigail Frempong, Christopher Lartei Aryee
View Author: Justice Agyei Ampofo
Journal Name: Finance & Accounting Research Journal
Volume: 3 Issue: 3 Page No: 50-66
Indexing: Google Scholar
Abstract:

The study was aimed at examining the role of high tax rises on the spending patterns of the people in Accra township of Ghana. The research gathered data from both secondary and primary sources and used the quantitative research method approach. The key instruments used for the data collection was questionnaire. In all seventy (70) respondents were selected for the study comprising thirty five (35) people from Accra township and thirty five (35) University of Ghana students. The study found out that taxation is very good for nation building since the allocation of funds depends upon the collection of taxes and the government used that revenue for specific purposes. This has a direct economic impact on the socio economic development of Ghana. The study found out that there is a fairly strong relationship between people spending and high tax rises. That is to say the study found out that when tax is high it affects people spending negatively especially the poor because it reduces their income levels, put a tax burden on them, it increases their expenditure and it also increases poverty. The study found out that to be able to ensure effectiveness and efficiency in our tax system it is essential to strike the right balance between designing an attractive tax, there must be transparency and effectiveness in the tax system, tax reform needs to be promoted to widen the tax base and bring a larger part of the population into the formal economy and also tax must reduce excessive reliance on aid and offers a path away from unsustainable revenue streams It is recommended that the government of Ghana should structure the tax based system in a way that there is no inequality in the payment by the poor and the rich and also the people of Ghana should understand the importance of taxation for the development of Ghana and hence there should not be invasion of tax since tax brought to light the importance of tax.

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