ABSTRACT

Countries all over the world depend on taxation as a means of generating the requisite resources to meet expenditure requirements. Among the contributors to the tax revenue are businesses in the private sectors which largely consist of small and medium sized enterprises such as hairdressers. In an attempt to fill a gap in research regarding tax compliance of hairdresser’s in the Sunyani Municipality, the study adopted the descriptive survey and cross-sectional study design. Simple random sampling techniques were used to select a sample size of 76 from a total population of 320 hairdressers. A close-ended questionnaire was employed in gathering primary data for the study. The study was analyzed using descriptive statistics and multiple regression. Key findings from the study suggest that the tax knowledge of hairdressers of Sunyani Municipality is low and that major factors contributing to tax compliance among hairdressers in the Sunyani Municipality included high tax rates discourage hairdressers effort comply, no penalty for hairdressers' non-tax compliance, tax compliance costs, inadequate tax knowledge among hairdressers, attitude and ethics towards tax, location of business and cash based nature of sizeable amount of transactions. The study concludes that there is a significant relationship between tax knowledge and tax compliance. It is thus recommended that, to improve voluntary tax compliance, tax authorities should simplify the tax laws and provide adequate tax training and education to hairdressers to enhance efficient tax collection.  SMEs should be encouraged to keep proper accounting records and file their tax returns promptly. Finally, promoting taxpayers‟ knowledge about awareness of offences and penalties could increase voluntary tax compliance by hairdressers.