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The major aim of this study was to examine the determinants of voluntary tax compliance in Tanzania from taxpayer perspectives. The specific objectives of the study were to examine TRA service quality factors affecting tax compliance, to determine Taxpayer trust factors affecting tax compliance, to determine public governance quality factors affecting tax compliance, and to examine the fairness of tax laws factors that affect tax compliance.
The study employed quantitative approach. Data were collected from 100 Small and Medium Enterprises (SMEs) operating in Dar es Salaam. Data were analysed descriptively and then factor analysis and later regression analysis were conducted to examine relationship among variables.
The findings have shown that voluntary tax compliance of SMEs in Dar e Salaam is influenced by several factors such as Tanzania Revenue Authority (TRA) service quality, taxpayer trust, fairness of tax laws, and regulations and public governance quality. In addition, voluntary tax compliance is positively related to these factors. Furthermore, the findings have shown that SMEs to a greater extent do not comply with tax laws and regulations as they fulfil their tax obligations by force, report incorrect income and delay to submit tax return on time
Voluntary tax compliance is a phenomenon of great importance to the national development; taxpayers who know their tax obligations and accomplish the same willingly are friends of national developments and prosperity. Therefore, the study recommends that the government should inculcate the culture of paying taxes willingly to the taxpayer by ensuring that they build trust and good public image and improve judiciary systems and investment in the infrastructures that benefit the majority of the taxpayers. |
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