Factors Influencing Tax Compliance Attitude in Small and Medium Enterprises (SMES) in Tanzania: A case of Dodoma Municipality
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Mzumbe University
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A Dissertation Submitted to School of Business Administration in Partial
Fulfilment of the Requirement of the Degree of Master of Business
Administration – Corporate Management (MBA - CM) of Mzumbe University,
Morogoro
The study was conducted on the factors influencing tax compliance in Small and Medium Enterprises (SMEs) in Dodoma Municipality, Tanzania. To meet this objective, the study employed three specific objectives. These objectives were, (i) to examine tax collection performance in Dodoma Municipality in the last three years (2014/15 – 2016/17); (ii) to determine economic factors influencing tax compliance in SMEs in Dodoma Municipality; and (iii) to assess non-economic factors influencing tax compliance in SMEs in Dodoma Municipality. The study employed a survey design. The questionnaire, interviews and Focus Group Discussions were used to collect data. Data analysis was undertaken by SPSS. The study found that the tax collection performance in Dodoma Municipality in years 2014/15 – 2016/17 was positive and increasing. The study found that the economic factors that influenced tax compliance attitude among taxpayers included the following; (i) tax rates; (ii) tax benefits; (iii) tax audit; (iv) penalties; and (v) fines. The non-economic factors that were found by the study to influence tax compliance included the following. (i) Perceptions of the taxpayers; (ii) Norms; and (iii) Perceived fairness. It was concluded that in recent years TRA had established good strategies to collect tax making the improvement in tax collection performance in Tanzania. Both economic and non-economic factors influence tax compliance among the SMEs. It was recommended that TRA and other stakeholders should sustainably improve their strategies to increase and improve tax collection performance.
The study was conducted on the factors influencing tax compliance in Small and Medium Enterprises (SMEs) in Dodoma Municipality, Tanzania. To meet this objective, the study employed three specific objectives. These objectives were, (i) to examine tax collection performance in Dodoma Municipality in the last three years (2014/15 – 2016/17); (ii) to determine economic factors influencing tax compliance in SMEs in Dodoma Municipality; and (iii) to assess non-economic factors influencing tax compliance in SMEs in Dodoma Municipality. The study employed a survey design. The questionnaire, interviews and Focus Group Discussions were used to collect data. Data analysis was undertaken by SPSS. The study found that the tax collection performance in Dodoma Municipality in years 2014/15 – 2016/17 was positive and increasing. The study found that the economic factors that influenced tax compliance attitude among taxpayers included the following; (i) tax rates; (ii) tax benefits; (iii) tax audit; (iv) penalties; and (v) fines. The non-economic factors that were found by the study to influence tax compliance included the following. (i) Perceptions of the taxpayers; (ii) Norms; and (iii) Perceived fairness. It was concluded that in recent years TRA had established good strategies to collect tax making the improvement in tax collection performance in Tanzania. Both economic and non-economic factors influence tax compliance among the SMEs. It was recommended that TRA and other stakeholders should sustainably improve their strategies to increase and improve tax collection performance.
Keywords
Tax Compliance Attitude, Small and Medium Enterprises (SMES