Dissertation Submitted in Partial Fulfillment of the Requirements for Award of the Master of Public Administration (MPA) of Mzumbe University Dar es Salaam
Voluntary tax compliance of the taxpayers to the taxation system has significant effect on enhancing competitive economic development of any country. However, in developing country including Tanzania negative voluntary tax compliance has been enshrined among the taxpayers. Kariakoo tax region has been reported as among of the tax regions predominated by negative voluntary tax compliance. Therefore, the main objective of this study was to examine factors influencing tax payers’ voluntary compliance with the tax system in Tanzania. A case of Tanzania Revenue Authority, in Kariakoo tax region. The study comprised three specific objectives which were to assess the effect of the prevailing tax laws, the effect of compliance costs, and determination of how taxpayers’ attitudes about tax influences their voluntary compliance with the tax system.
The study employed both qualitative and quantitative research approach, while data collection method employed triangulation approach where data were collected from different sources. These include simple random sampling, purposive sampling and systematic sampling procedure. The collected data were dully managed to ensure their validity and reliability. The study revealed that majority of the respondent strongly agreed that unfair tax assessment and heavy tax penalties are major factors for non-tax compliance among the tax payers. Because their administration by tax officers involves unnecessary coercive force which adversely affects tax payers’ voluntary compliance with the tax system. Moreover, information among tax payers and the government officials is another vital factor for voluntary tax compliance.
The study further concluded that most of the taxpayers in Kariakoo tax region fails to comply with the tax system because several reasons. But the major current causative is due to lack of ability to pay tax.
Recommendation for further study were given on areas of how motivational factors can increase tax payers’ voluntary compliance with the tax system. But also further research is expected on the relationship between voluntary tax compliance strategy and the deterrence measures kind of strategy.