CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
From the days of Pharaohs in Egypt to modern day government, tax and taxation has always been part of society. There have being various reasons as to why taxes are being imposed. And there are various tax administration systems that have been adopted throughout history. In order to fund various government projects, tax is introduced as a compulsory charge, levied on individual and entities in a given society. The word tax is from a Latin word “taxo” which can be defined as a mandatory financial charge or some other type of levy imposed upon an individual or other legal entity (Taxpayer) by a governmental organization in order to fund various public expenditures . There is a serve punishment for refusal to pay taxes and underpayment of taxes across all nations. We can ground tax in to two different forms; direct and indirect taxes. Shirley and Karen 2012 defined tax is a „‟forced payment made to a governmental unit that is unrelated to the value of goods or services provided”. Before 2009, Ghana had various independent institutions and agencies in charge of tax collections and administration. As at December 2009, the three revenue agencies which include Customs Excise and Preventive Service, Internal Revenue Service, Value Added Tax Service and Revenue Agencies Governing Board Secretariat were formed in conformity with the Ghana Revenue Authority Act, 2009 (Act 791). Rai 2012 stated that collections of taxes are mandatory responsibility for all civilized countries. The reasons why taxes should be collected includes; to meet their day-to-day expenses related to maintenance of a free and fair society, to finance developmental activities, to control the economy through fiscal measures, and to a certain extent, to change the economic behavior of people. Tax administrations modern in era seek to optimize tax collections while minimizing administration costs and taxpayer compliance costs (Okello 2014). There is still room for improvement in the design and delivery of client-focused taxpayer service programs and better engage with the private sector and other stakeholders. The United states Tax administration, defined tax administration as the administration, management, conduct, direction, and supervision of the execution and application of the internal revenue laws or related statutes (or corresponding laws and statutes of a State) and tax principles to which the United States is a party; and the invention and formulation of Federal tax policy relating to internal revenue laws either existing or proposed, related statutes, and tax conventions
