Author(s): Samuel Narh Dorhetso, Kingsley S. Tornyeva

The purpose of this study was to empirically examine the moderating effect of taxpayer financial status on the relationship between petroleum tax, compliance and total tax revenue. The study was underpinned by the ability to pay principle of taxation and the demand and supply theory of incidence, and relied on secondary data collected from Ministry of Finance and Economic Planning, Ghana Statistical Services, International Monetary Fund database, World Bank database, United Nations’ Commodity Trade Statistics database, and Ghana Revenue Authority. The data were analyzed using partial least squares structural equation modelling. Following the two stage approach, the results of the bootstrapping run to test for moderation revealed that both stated hypotheses yielded positive but insignificant relationships between the constructs. However, the findings revealed a positive and significant effect of taxpayer financial status on total tax revenue. The deductions from the study have brought new theoretical insights into the moderating effects of the financial status of the taxpayer on the links between petroleum tax and compliance, and compliance and total tax revenue respectively. It has also brought insights into the mediation of compliance between petroleum tax and total tax revenue. The findings of the study could offer direction to policy makers on the planning of an attractive setting of taxation that would forestall avoidance and evasion of tax in the economy, and proliferate tax compliance propensity and total tax revenue in Ghana. Keywords: gross domestic product; petroleum tax; per capita income; tax compliance; domestic savings rate