The Effects of Petroleum Taxes on Per Capita Income of Ghana

Purpose: The specific objective of this paper was to estimate the effects of petroleum taxes on per capita income in Ghana. Design/Methodology/Approach: This quantitative study used secondary data sourced from the ministry of finance and economic planning (MOFEP), the Ghana statistical services (GSS), and the world bank database. Correlation analysis was initially used to measure the strength and direction of association that existed between the variables, and a series of multiple regressions were subsequently run to predict the degree to which petroleum tax affects per capita income in Ghana. Findings: The study revealed that there was a positive and statistically significant correlation between all the taxes examined and per capita income (PCI). However, petroleum tax was not found to be a statistically significant independent predictor of PCI. Implications/Research Limitation: It is projected that the verdicts of this study would meaningfully contribute to literature on the general effects of taxes, especially the effects of petroleum tax on per capita income. However, the study had limitations since the accuracy of the secondary data used could not be autonomously substantiated. Practical Implication: The findings of the study could provide guidance for policy makers on the adaptation of an apposite matrix of taxation that would avert deadweight losses in the economy, and proliferate per capita income in Ghana. Originality/Value: This study scrutinised the effects of petroleum tax on per capita income in Ghana, and sought to fill a critical research gap that was identified.