The impact of tax compliance on the performance of micro enterprises in the Obuasi municipality

Abstract

This study examines the impact of tax compliance on the performance of micro enterprises in the Obuasi Municipality. The background reveals the importance of tax compliance for revenue generation and sustainable economic development. The purpose of the study is to assess how tax compliance affects the performance of micro enterprises in the municipality. A mixed-methods research approach is employed, combining qualitative interviews with key stakeholders and a quantitative survey of micro enterprise owners. The major findings indicate that tax compliance significantly influences the financial performance, growth prospects, and access to government support programs of micro enterprises. Improved tax compliance positively correlates with increased business legitimacy, customer trust, and long-term viability. Conversely, non-compliance leads to penalties, loss of public trust, and limited access to financial resources. The study concludes that enhancing tax compliance among micro enterprises is crucial for fostering their performance and contributing to local economic development. Therefore, the study recommends implementing education and awareness programs, simplifying tax processes, providing support services, and enhancing accountability measures to encourage tax compliance among micro enterprises in the Obuasi Municipality.