Effect of Taxpayer Knowledge and Taxation Socialization on Taxpayer
Compliance: The Mediating Role of Taxpayer Awareness
SMART ASOMANING SARPONG1,*, MICHAEL YEBOAH2, KOFI MINTAH OWARE3,
BENJAMIN ADJEI DANQUAH4
1Centre for Social Science Research,
Kumasi Technical University,
Kumasi 854,
GHANA
2Department of Accountancy and Accounting Information Systems,
Kumasi Technical University,
Kumasi 854,
GHANA
3Department of Banking Technology and Finance,
Kumasi Technical University, Kumasi 854,
GHANA
4Liberal Studies Department,
Kumasi Technical University,
Kumasi 854,
GHANA
*Corresponding Author
Abstract: - This study dives into the complex dynamics of taxpayer compliance, investigating the interactions
between knowledge, taxation socialization, and awareness in the context of fiscal control. To recognize the critical
significance of taxpayer compliance to ensure economic stability, the study emphasizes the symbiotic relationship
between legal requirements, societal influences, and individual comprehension. The study plays a critical influence
on social norms and the moderating role of taxpayer awareness. The study prioritizes an enhancement to
compliance modalities by giving theoretical underpinning and raising significant recommendations for government,
tax officers, and researchers to ensure economic growth and development. The study used a structured
questionnaire through purposive sampling to choose two and eleven (211) taxpayers within the Kumasi
Metropolitan. The study revealed a positive correlation between tax knowledge and compliance. This study shows
that socialization on taxpayer compliance has a positive significant impact. The effect of tax knowledge and tax
socialization on taxpayer awareness is crucial, resulting in improved compliance. The study recommends efforts to
improve tax socialization, counseling on the relevance of paying taxes; and intensifying educational agendas to
raise residents' understanding of taxation. Finally, the findings show the proactiveness and the potential to
significantly enhance tax compliance and knowledge among Ghanaian taxpayers.
Key-Words: - Tax System, Path Analysis, Tax Socialization, Taxpayer Compliance, Taxpayer Awareness, Ghana.
Received: July 31, 2023. Revised: March 2, 2024. Accepted: April 24, 2024. Published: May 17, 2024.
1 Introduction
To determine the stability and sustainability of a
nation’s economic framework in a fiscal governance
complex landscape, Taxpayer compliance plays a
significant role, [1], [2]. The state has a strong
obligation to build infrastructure to financially
manage public services. The government must have
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systems that may influence taxpayers to raise enough
funds for effective and efficient Tax administration.
In a taxation ecosystem, Taxpayer awareness and
compliance are very paramount to legality and
sanctions, [3].
Taxpayers’ awareness and compliance relations
are known, and significant to individuals
understanding of the tax rules and regulations that
outline the encouragement and willingness to fiscal
obligations. Current literature on taxation
socialization and sociology are influenced by
attitudes, social norms, and shared values that
commit taxpayers to their responsibilities, [4], [5].
The correlation between taxation socialization,
taxpayer knowledge, and compliance is related to the
taxpayer’s behavioral ecosystem. This makes
taxpayer awareness a very significant step in
translating knowledge, socialization, and compliance,
[6].
The theoretical underpinnings of tax compliance
reveal insights that may practically influence
policymakers, tax authorities, and educators to
mitigate government efforts to raise funds. The
complication of taxpayer behavior necessitates a
holistic approach that may harmoniously affect the
information, awareness, and socialization of
taxpayers. The contributions of this study outline
strategies for making it attractive for taxpayer
compliance, generating a symbiotic relationship
between citizens of the country and the tax system,
and ultimately contributing to the nation's economic
growth and development.
According to [1], [2], higher levels of taxpayer
knowledge have a positive correlation with
compliance. Knowing and Understanding tax
regulations, taxpayer obligations, and consequences
of refusing to pay tax encourages accountability and
reduces the likelihood of unintentional violation of
tax evasion and avoidance.
Furthermore, [3], explores the effect of
edification and information broadcasting in raising
taxpayer knowledge and encouraging voluntary
compliance.
Taxpayers' compliance behavior is significantly
influenced by the societal setting and work
environment. Taxpayers' sensitivities of their fiscal
obligations are fashioned by social norms, attitudes,
and shared values, as reported in taxation
socialization, [4], [5], examine social factors impact
on compliance decisions. Thoughtful of how societal
factors mediate with individual viewpoints offers a
more comprehensive representation of compliance
dynamics. The knowledge, socialization, and
compliance, interactions with taxpayer awareness
appear as imperative moderators.
According to [6], [7], awareness acts as a
cognitive bridge to dissect information and cultural
essentials into informed compliance decisions. The
findings in [8], [9], highlight the relevance of specific
awareness efforts in inspiring taxpayer voluntary
compliance. Existing literature on taxpayer behavior
and Social Norms Theory underpins the interaction
of taxation socialization, taxpayer knowledge, and
compliance. According to this theory, an individual's
action is extremely influenced by the apparent norms
of their social environment. The context of the Social
Norms Theory of taxation clarifies how compliance
choices, attitudes, social expectations, and shared
values influence taxpayers.
The initial works of [1], [6] align with Social
Norms Theory to emphasize the significance of
knowledge in inculcating a sensitivity of
responsibility and dutifulness among taxpayers.
According to earlier studies, people who are more
informed of tax legislation and requirements, are
prospective to admit societal norms for individuals to
freely satisfy fiscal obligations. Moreover, taxation
socialization defined by [4], [5], aligns with Social
Norms Theory to state the critical role of social
variables in taxpayers’ compliance decisions.
It is factual that People's perceptions of what is
expected and accepted in a country about tax
compliance are mostly determined by social norms,
which are considered influential during the
socialization process.
In recent literature, the sociocultural environment
of taxpayers operates acts as a normative guide,
shaping their attitudes and behaviors towards
compliance.
According to [6], [8], [9], the mediating role of
taxpayer awareness supports the use of Social Norms
Theory. The hypothesis shows that awareness acts as
a cognitive bridge between awareness and
compliance decisions. Taxpayers are aware of not
just their social responsibilities and legal obligations,
but also the prevailing social norms accompanying
tax compliance in the tax ecosystem. As a result, the
existing studies necessitate targeted awareness
campaigns to influence taxpayer attitudes toward
societal expectations for fiscal responsibility. This
study provides a comprehensive clarification of how
social norms recognized by taxpayer knowledge and
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taxation socialization become internalized through
awareness, eventually prompting compliance
behavior and bringing Social Norms Theory into the
tax compliance framework.
This theoretical contribution will be a literature
source for future studies, identifying multifaceted
mechanisms that outline the relationship between
taxpayers and societal prospects of tax compliance.
Tax is a legitimate responsibility imposed on people
and entities to pay to the government, which is then
used for public service and infrastructure
development, [10]. Taxation is one of the most
important sources of public revenue for many
countries. In Malaysia, for example, taxes accounted
for 66.7% of national revenue in 2008, [11]. Tax
receipts make up 78% of revenue in Indonesia, [12].
Tax knowledge (TK), is the most significant
obligation that taxpayers should have because they
can't perform all their tax obligations, including tax
payments and tax reporting, [13]. "Tax knowledge" is
defined by the Internal Revenue Service (IRS) as "the
taxpayer's awareness or sensitivity to tax legislation",
[14]. According to [15], knowledge is information
that someone knows or realizes. Tax knowledge, in
general, refers to an understanding of the most
important tax policies implemented in a certain
jurisdiction, [16]. According to [17], a lack of tax
knowledge might lead to noncompliance by
taxpayers.
Taxpayer awareness (TA), according to [18], is a
state in which taxpayers are aware of, comprehend,
and freely apply tax regulations, because taxes are a
source of state financing. Taxpayer awareness is
necessary to enhance tax compliance, [19]. When
there is a tax system in place to collect tax income,
such as the Self-Assessment System, taxpayer
knowledge is a critical instrument for tax
compliance, [20], [21].
Tax Compliance (TC) can be defined as
taxpayers’ comprehension of all taxation rules and
procedures, and how well they can perform the tax
filing procedure efficiently, [22], [23]. Taxpayers who
comply with appropriate tax rules and regulations
meet their tax obligations and exercise their tax
rights, [24]. [25], states that the taxpayer meets all
conditions by paying all taxes on time and filing all
tax returns by the due date. Various factors influence
taxpayer compliance, according to [23], [26],
including state economic taxation, service to citizens,
tax audit, and tax rate. Non-compliant taxpayers are
those who are unable to comply with their duties due
to a lack of awareness of the tax rules [4], [7]. [27],
observed that taxpayers’ behavior has been impacted
by their understanding of taxes.
Tax socialization (TS) is a method of teaching
the general public, particularly taxpayers, about all
aspects of taxation, particularly legislation and
processes, through appropriate ways, [17]. Tax
socialization can assist people to see the value of
having to pay taxes as some kind of nationwide
participation in the gathering of funds for
government funding and progress, [28], [29]. Either
way, society can carry out socialization activities
efficiently which should be generally accepted by the
people themselves, [27]. In a related study, research
was conducted by [30] on the impact of tax
understanding, and tax socialization with regard to
tax sanctions as a moderating variable. The data was
analyzed using multiple linear regression, and the
study discovered that tax socialization and tax
awareness had a favorable and relevant impact on tax
compliance. The study's findings also revealed that
taxpayer knowledge has a positive impact on
compliance behavior.
[11], [22], [28], [31], research on the topic
‘impact of public awareness, taxation socialization,
penalty fees, and financial irregularities on
compliance behavior, using excellent service as a
mediator variable’. The study's purpose is to discover
how service quality influences the relationship
between taxpayer knowledge, socialized taxation,
additional taxes, regulatory expenses, and tax
compliance. The data was examined using multiple
regression analysis. The study discovered that there
was a full mediating role between tax awareness, tax
penalties, compliance cost, and taxpayer compliance,
[32]. Service quality, on the other hand, has no
association with tax socialization or taxpayer
compliance.
[10], [33], performed another study on "the
impact of taxpayer knowledge and taxation
socialization on taxpayer compliance; the relevance
of taxpayer awareness in the emerging Indonesian
economy." His study sought to examine the impact of
taxpayer knowledge and taxation socialization on
taxpayer compliance, as mediated by tax awareness.
The data was examined using regression and path
analysis. The study's findings demonstrate that
taxpayer knowledge and taxation socialization have a
significant impact on taxpayer compliance and
awareness. Taxpayer knowledge also helps to
moderate the effects of taxation socialization on
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taxpayer compliance. [34], [35], [36], [37],
investigated the impact of tax understanding,
awareness, and amnesty on tax-payer compliance.
The purpose was to investigate the impact of tax
comprehension, tax awareness, and amnesty
perception on taxpayer compliance. This study was
analyzed using the convenience sampling technique,
and the data demonstrated that taxpayer
comprehension, awareness of taxes, and views of tax
amnesty all had a favorable and substantial effect on
taxpayer compliance. The study also discovered that
gender affects tax compliance, with females being
more obedient to tax payments than males.
[24], conducted a related study on tax
knowledge, tax regulation, and tax compliance. The
study aims to determine whether citizen awareness
would improve tax compliance by moderating tax
knowledge and understanding of tax policy. The
data was analyzed using a quantitative approach.
The study discovered that tax regulation education
and comprehension, as well as taxpayer
comprehension, all correspond to taxpayer
compliance. The study also found that tax
compliance is unaffected by indirect tax awareness
and understanding in individuals based on taxpayer
knowledge. This study investigates the complex
interplay of taxpayer knowledge, taxation
socialization, and taxpayer compliance, with a
special emphasis on the mediating role of taxpayer
awareness. Lastly, the study found that taxpayer
understanding, as well as awareness and grasp of
tax rules, had a positive and substantial link with
TC.
Most of the literature above focuses on each
factor—knowledge, socialization, and awareness—
in isolation. There is a gap in knowing how these
factors interact dynamically, impacting one another
and shaping taxpayer compliance as a whole. The
vast majority of investigations take place in distinct
cultural and regional contexts. There is a need for
research on how cultural differences and contextual
nuances affect the linkages between knowledge,
socialization, awareness, and compliance. Many
research gives cross-sectional insights, providing a
picture of the relationships at a particular point in
time. There is a void in longitudinal assessments
that follow the evolution of taxpayer behavior over
time, taking into account how knowledge
acquisition, socialization, and awareness change
and affect compliance over time.
2 Materials and Methods
In this study, four variables were used to examine
individuals’ views concerning the payment of tax.
Tax socialization and tax knowledge are independent
factors, with tax awareness serving as a mediating
variable and tax compliance serving as the dependent
variable. The information applied in this research is a
modified form questionnaire used by [15]. Seven
question indicators were used to assess tax
socialization. Individuals' levels of agreement with
tax socialization were measured using a 7-point
Likert scale (1= strongly agree to 7= strongly
disagree). Sample questions used were “The tax
collectors provide explanation and understanding of
taxes”, and “I feel I receive the best result of the
taxes I pay”. Seven question indicators were used to
assess tax knowledge. The 7-point Likert scale
(1=strongly agree to 7=strongly disagree) was used to
assess individuals' level of agreement about tax
knowledge. A few of the questions asked are: "I
know that the tax function is to finance regional or
governmental development”, and "I know taxpayers
will be sanctioned if they do not pay their taxes”. Six
question indicators were used to assess Tax
Awareness as a mediating variable. Individuals' level
of agreement toward tax awareness was measured
using a 7-point Likert scale (1= strongly agree to 7=
strongly disagree). Some of the questions include,
"Paying taxes is a form of participation in
governmental development," and "I believe it is
necessary to pay taxes." Lastly, Tax Compliance was
measured using seven question indicators.
Individuals' levels of agreement toward tax
compliance were measured using a 7-point Likert
scale (1= strongly agree to 7= strongly disagree).
Among the questions asked are "I always obey the
obligation to pay tax”, and “I already know the limits
of the final payment of tax needed to pay”.
2.1 Procedure
The questionnaires were administered to 211
taxpayers from Asafo in the Kumasi Metropolitan
Assembly, in the Ashanti Region of Ghana with a
concentration of rural banks, department stores,
traders, hawkers, printing press, and many more.
The data was collected in person during work
hours. Taxpayers were made to fill out the
questionnaire without duress or coercion. The data
was captured using an Excel sheet and was later
transferred to SPSS version 26 for analysis.
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2.2 Data Analysis
In this research, Pearson’s correlation, Reliability,
and validity analysis, path, and regression analysis
were used. To determine the link between the
variables under consideration, Pearson's correlation
was used. The Cronbach's alpha value produced by
the reliability test was used to analyze the variables'
internal consistency. A variable is considered
consistent if its Cronbach's alpha value is greater than
0.7. The validity study was conducted to determine
whether the variables are valid and whether tax
awareness mediates the effect of tax knowledge and
tax socialization on tax compliance. Tax compliance
is the dependent variable, tax knowledge and tax
socialization are the independent variables and tax
awareness is the mediating variable for this study.
Tax compliance denotes how correlated taxpayers
follow a given country’s tax laws and regulations. It
comprises the timely and proper disclosure of
revenue/income, deductions, and other important
financial data, as well as the payment of taxes owed
by individuals and businesses. In the research, we
examined tax compliance using the proportion of
taxes paid on time, the accuracy of tax filings, and
self-reported compliance behavior through surveys
and interviews. High levels of tax compliance
designate the effectiveness of a tax system and
taxpayers' desire to carry out their social obligations
and responsibilities.
Tax knowledge indicates how people's awareness
of the country’s tax system, with its rules,
procedures, regulations, and prospective tax savings
options. It comprises both factual knowledge and
procedural knowledge. In the study, Tax knowledge
was tested by assessing individuals' grip on various
tax ideas as well as their ability to demonstrate this
knowledge in a practical setting. Tax socialization in
this context refers to the social and cultural
fundamentals that influence an individual's beliefs,
attitudes, and behaviors on taxation administration in
the nation. It comprises the role of peers, family,
academic institutions, the media, and other
socializing forces that form people's attitudes
regarding taxation. Surveys, interviews, and
observations are employed to explore individuals'
experiences, interactions, and exposure to tax-related
information and discussions within their social
environment according to Tax socialization. Tax
awareness acts as an intermediary process between
tax knowledge and tax socialization, influencing tax
compliance. It relates to people's awareness, focus,
and understanding of their tax obligations, rights, and
responsibilities. Tax awareness is not just being
aware of tax laws and regulations, but also
understanding the consequences of non-compliance
and the advantages of compliance. This variable was
assessed using self-reported awareness levels, views
of tax justice, attitudes toward taxation, and
recognition of tax-related information in a variety of
contexts, such as ads, educational materials, and
official communications.
2.3 Hypothesis Tested
H1: There is a positive relationship between taxpayer
knowledge and taxpayer compliance
H2: Tax socialization positively affects taxpayer
compliance
H3: Tax knowledge influences tax awareness
positively.
H4: Tax socialization impacts taxpayer awareness
positively.
H5: Tax understanding influences taxpayer
compliance positively.
3 Results
3.1 Demographics
The Table 1 displays the demographic background of
the study participants. Out of the total responses
obtained, 66.5% were males and 33.5% were
females. The age group with the highest response
was the group ranging from 23 to 25 years old
(32.6%). The next age group with the second highest
response was the 26 to 30 years group with 29.8%,
other age group followed with 25.6% from the ages
of 31 years and above, and the last but not the least
group with 11.6% ranged from 18 to 22 years and
lastly the age group from less than 18 years was 1%.
Table 1. Demographic statistics
Variables
Frequency (N)
Gender
Male
143
Female
72
Age
Less than 18
years
1
18-22 years
25
23-25 years
70
26-30 years
64
31 years and
above
55
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3.2 Reliability and Validity Analysis
In this section, the study assessed the reliability and
validity of the measurement items used to
operationalize the variables of interest: Tax
Compliance, Tax Knowledge, Tax Socialization, and
Tax Awareness. Cronbach's alpha coefficient was
used to assess reliability, which assesses the internal
consistency of each variable's items.
The results in Table 2 show that the Tax
Knowledge questions had the highest internal
consistency (Cronbach's alpha = 0.762), implying
that they consistently measure the construct. Tax
Compliance had a high internal consistency
(Cronbach's alpha = 0.703), followed by Tax
Socialization (Cronbach's alpha = 0.629) and Tax
Awareness (Cronbach's alpha = 0.566).
Items that were not reliable were omitted from
further analysis to ensure the measurement scales'
robustness. Validity was determined by assessing the
correlation coefficients (r) between the selected items
and a crucial value. A higher correlation coefficient
suggests more validity. The results reveal that all of
the examined variables had valid correlations, with
correlation coefficients greater than the critical
figure.
Table 2. Reliability and Validity results
Tax Compliance
Correlation coefficient (r)
critical value
Decision
Cronbach’s alpha
TC1
.390
0.138
Valid
.703
TC2
.295
0.138
Valid
TC3
.418
0.138
Valid
TC4
.395
0.183
Valid
TC5
.567
0.138
Valid
TC6
.611
0.138
Valid
TC7
.572
0.138
Valid
Tax Knowledge
TK2
.596
0.138
Valid
.762
TK3
.532
0.138
Valid
TK5
.562
0.138
Valid
Tax Socialization
TS1
.578
0.138
Valid
.629
TS2
.222
0.138
Valid
TS3
.371
0.138
Valid
TS5
.277
0.138
Valid
TS6
.380
0.138
Valid
TAX AWARENESS
TA1
.381
0.138
Valid
.566
TA2
.404
0.138
Valid
TA3
.383
0.138
Valid
TA4
.500
0.138
Valid
TA5
.348
0.138
Valid
Table 3. Correlation results
Variable
1 TC
2 TK
3 TS
4 TA
Mean
SD
Tax Compliance
2.9468
1.17431
Tax Knowledge
.471**
2.9519
1.68194
Tax Socialization
.255**
.082
3.795
1.35397
Tax Awareness
.287**
.457**
.174*
3.0102
1.21274
Table 4. Regression Result 1
Variable
Estimate
Std. Error
t-value
p-value
R2
Constant
1.260
.238
5.288
P<.001
.269
TK
.316
.041
7.681
P<.001
TS
.189
.051
3.705
P<.001
Dependent: Tax Compliance
Independent: Tax Knowledge, Tax Socialization
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3.3 Correlation Analysis
The correlation analysis was conducted to determine
whether or not the variables were related. Table 3
shows the results. There was a positive relationship
between the factors, as can be shown. The
relationship is significant except the one between Tax
Socialization and Tax Knowledge.
Table 3. Correlation results
Variable
1 TC
2 TK
3 TS
4
TA
Mean
SD
Tax
Compliance
2.9468
1.17431
Tax
Knowledge
.471**
2.9519
1.68194
Tax
Socialization
.255**
.082
3.795
1.35397
Tax
Awareness
.287**
.457**
.174*
3.0102
1.21274
3.4 Model Estimation
To attain the study's goal, regression and path
analysis were used in this study. The regression
analysis was performed to investigate the impact of
taxpayer knowledge and tax socialization on
compliance behavior. The regression analysis was
also utilized to investigate the relationship between
the mediating variables (tax knowledge and
awareness) and the outcome variable (tax
compliance). From Table 4, it is evident that a unit
increase in taxpayer’s knowledge and Tax
Socialization increases Tax Compliance. This
difference is noteworthy because the p-values for
both Tax Knowledge and Tax Socialization are less
than 5%. The R-squared value (.269) indicates that
both TK and TS explain 26.9% of the variation in
TA.
Then, the connection between Tax awareness of
Taxpayer compliance was analyzed. From Table 5,
there is evidence that a unit of increased tax
Awareness leads to an increase in taxpayer
compliance. The p-value is less than 5%, confirming
that tax awareness has a significant effect on tax
compliance.
Table 5. Regression Result 2
Variable
Estimates
Std
error
t-
value
R-
value
R2
Constant
1.846
.260
7.104
P <
.001
.084
TA
.342
.077
4.430
P<
.001
3.5 Path Analysis
The path analysis was performed to see whether the
moderating variable (Tax Awareness) influenced the
influence of Tax Knowledge and Tax Socialization on
Tax Compliance. Figure 1 depicts the paths that
connect the variables. The graph below illustrates a
significant association between Tax Knowledge and
Tax Compliance, as well as a strong direct impact of
tax socialization on tax compliance. Furthermore,
both tax knowledge and tax socialization influence
tax awareness. Tax understanding has a direct impact
on taxpayer compliance. The relationships between
the variables are all important based on the pathways.
Tax awareness was found to have a mediating
influence on the impact of Tax knowledge and Tax
socialization on tax compliance, Figure 1
demonstrates that Tax awareness moderates the
impact of Tax knowledge and Tax socialization on
Tax compliance.
Fig. 1: Path diagram
Note:( **, p<.05 and *, p<.001)
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4 Discussion
The primary goal of the study is to investigate the
impact of tax awareness and tax socialization on tax
compliance. This study also aims to determine
whether taxpayer awareness mitigates the effect
under consideration.
H1: The findings of the analysis revealed that
taxpayer awareness has a beneficial impact on tax
compliance. This supported the study's first
hypothesis. Taxpayers' understanding of free worker
tax restrictions, according to the attribution theory,
can also encourage tax-payers to be able to pay their
taxes. People who pay taxes comprehend rules about
taxes thereby increasing the need for more people to
pay taxes. The importance of taxpayer compliance
might be felt directly or indirectly by taxpayers. This
research is similar to [27], [30], that is having a clear
understanding of tax. The greater the taxpayer's
knowledge, the better their understanding of taxation
and the more likely they are to obey taxation
regulations.
According to the regression results, taxation
socialization has a favorable link with tax
compliance. 1. According to attribution theory, both
internal and external influences have an impact on a
person's behavior. Both of these considerations are
intended to encourage people to pay their taxes on
time. However, everyone's level of awareness is
different. As a result, tax socialization has the
potential to make individuals more aware of and
respectful of their tax duties. It corresponds to the
findings of other researchers, [11], [14], [35], [36],
[37], found that socializing affected tax compliance.
H3: The data demonstrated that taxpayer knowledge
increased taxpayer awareness positively. Based on
the specificity theory, taxpayer knowledge and
comprehension were used to measure taxpayer
behavior. If a person who pays taxes uses the internet
to learn about tax rules and is aware of and
understands the consequences of not doing so, while
taxes are unavoidable, this strategy helps make those
who do not know tax more enlightened about it. The
more the knowledge about taxation the more
improved knowledge of taxation among taxpayers.
Other people's research indicates that taxation
knowledge is directly related to tax awareness, [10],
and that taxpayer awareness improves as a result of
information.
H4: According to the evidence, tax socialization
increases taxpayer awareness. If the previous taxation
socializing is seen as inefficient by the user, the
taxpayer may become less aware of the significance
of paying taxes, according to the concept of
consistency attribution. As a result, tax socialization
should be strengthened to maintain a sustainable
level of knowledge among taxpayers. Others have
discovered that tax socialization improves taxpayer
awareness (e.g., [10]. As a result of the greater tax
socialization, taxpayers will be more conscious about
the need to pay a tax.
H5: According to the research, increased taxpayer
awareness improves tax compliance. Tax awareness
becomes an inner drive that manifests as an inner
urge to act obediently, and is fueled by tax
knowledge, preferential tax attitudes, and taxpayer
characteristics. Taxation awareness gives taxpayers a
clearer understanding of the function of taxes in a
country, resulting in a favorable appraisal of taxes.
Taxpayers who think taxes are a good thing don't
think of them as a burden. This is consistent with
prior research [21], which indicated that increasing
taxpayer awareness enhances tax compliance. The
greater the taxpayers' comprehension, the more aware
they are of their tax obligations, resulting in
increased tax compliance.
[10], the research found that taxpayer
understanding and perceptions of tax amnesty had a
significant and positive influence on TC. [30],
reached the same conclusion, saying that taxpayer
awareness and tax integration had a considerably
favorable effect on TC. However, [23], found that
indirect knowledge and TC of tax law in society
through taxpayer awareness have no significant
impact on TC. According to [11], service quality has
a significant impact on controlling the relationship
between taxpayer awareness, additional taxes,
compliance costs, and TC. [30], found that taxpayer
knowledge and tax socialization have a significant
impact on compliance and awareness among
taxpayers. Taxpayer knowledge also helps to
moderate the effects of taxation socialization on
taxpayer compliance among Indonesians. This study
discovered a link between tax knowledge and tax
compliance, with tax socialization having a beneficial
influence on taxpayer compliance. Tax knowledge
and socialization had a favorable influence on tax
awareness, which in turn had a beneficial effect on
tax compliance. Even though a similar study has
already been done, this research focused more on the
people of Asafo and Ghana as a whole.
This study makes numerous contributions
beyond other research endeavors. Enhanced
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2024.21.99
Smart Asomaning Sarpong, Michael Yeboah,
Kofi Mintah Oware, Benjamin Adjei Danquah
E-ISSN: 2224-2899
1224
Volume 21, 2024
Understanding of Taxpayer behavior by investigating
the links between tax knowledge, tax compliance, tax
awareness, and tax socialization, this study sheds
light on the elements that influence taxpayer
behavior. Understanding these dynamics is critical
for policymakers’ analysts and tax officers to develop
successful compliance tactics. The study extensively
tested the validity and reliability of the measurement
tools to ensure that the findings were robust. This
improves the methodological rigor of research on
behavioral economics and tax compliance.
Tax awareness in the study is used as a mediating
variable that emphasizes the role of cognitive
variables in shaping tax compliance behavior. This
research adds nuance to previous theories of tax
compliance and emphasizes the importance of
interventions aimed at raising taxpayer knowledge.
This study's conclusions have practical consequences
for tax officials, policy analysts, and tax
administration practitioners. The variables that
influence tax compliance to shape targeted
interventions and educational campaigns aimed at
increasing the level of compliance and the efficiency
of the tax system. In conclusion, this study increases
our thoughts on tax compliance behavior and
provides significant insights that can be used to
inform tax policy and practice. The work adds to the
existing literature on tax compliance and behavioral
economics through methodological rigor, mediating
factors, and providing practical consequences.
5 Conclusions and Recommendations
According to the findings of this study, tax
knowledge and tax socialization have a favorable
impact on tax compliance in Ghana. Another study
discovered that tax socialization improves taxpayer
compliance. It was discovered that taxpayer
knowledge and socialization have a substantial
influence on taxpayer awareness. Finally, it was
discovered that taxpayer awareness improved
taxpayer compliance. Tax socialization can help
taxpayers become more conscious of the need to pay
their taxes. It was once again demonstrated that
people who have a great deal of information about
the need to pay any taxes are more obedient in their
payments, encouraging national growth by increasing
taxpayer commitment to comply. This study will be
used as a gauge for participants to become more
involved in efforts to raise tax commitment for
payers to comply, such as frequent tax socialization
to the general public so that individuals have a better
understanding of taxes and may meet their tax
obligations. The recommendation that can be given in
this study is that taxpayers should be enlightened
more on taxation principles and procedures so that
the need to pay tax will not be misunderstood.
Another recommendation is that the Ghana Revenue
Authority promote tax socialization and counseling
about the importance of paying taxes, as well as
taxation programs and other social activities that help
improve tax perception.
Acknowledgments:
Staff of the Institute of Research, Innovation and
Development - IRID, Kumasi Technical
University—KsTU, Ghana.
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
Conceptualization, S.A.S.,; methodology, K.M.O.,
and S.A.S.; software, S.A.S.; validation, K.M.O.,
B.A.D, and M.Y.; formal analysis, S.A.S.;
investigation, K.M.O., S.A.S., B.A.D, and M.Y.;
resources, S.A.S., B.A.D, and M.Y.; data curation,
S.A.S.; writing—original draft preparation, S.A.S.,
B.A.D, and M.Y.; writing—review and editing,
K.M.O., S.A.S., B.A.D, and M.Y.; supervision,
S.A.S.; project administration, S.A.S. All authors
have read and agreed to the published version of the
manuscript.
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
This research received no external funding.
Data Availability Statement
The data presented in this study are available on
request from the corresponding author.
Conflicts of Interest
The authors declare no conflict of interest.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en_
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WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2024.21.99
Smart Asomaning Sarpong, Michael Yeboah,
Kofi Mintah Oware, Benjamin Adjei Danquah
E-ISSN: 2224-2899
1227
Volume 21, 2024