Determinants of Tax Compliance in the Informal Sector: The Intentions of TIN and Non-TIN Registered Taxpayers

Studies have relied on the extended version of the Theory of Planned Behaviour (ETPB) in predicting the compliance intentions of individuals. However, few papers have examined the joint effect of the ETPB variables and other psycho-social factors in explaining the tax compliance intentions among individuals (i.e. persons with tax identification numbers (TIN) and those without tax identification numbers) in the informal sector. We examined the effect of ETPB variables including trust, perceived tax complexity, and intervention strategies on the compliance intentions of TIN registered and Non—TIN registered taxpayers. Employing cross-sectional data from a survey of micro and small self-employed individuals from the Ghanaian informal sector, the partial least square structural equation modelling technique was used to analyse the data. We find that individuals without TIN have high intentions to be tax compliant compared to those with TIN. Policymakers would have to further strategize in knowing the reasons accounting for high compliance intention among Non-TIN taxpayers beyond the intended purpose of the TIN that is supposed to make TIN registered taxpayers more responsible