A Dissertation Submitted in Partial/ Fulfillment of the Requirements for Award of
the Degree of Master of Business Administration (MBA) in Corporate
Management of Mzumbe University
This study is about the impact of tax evasion on revenue collection performance in
Tanzania. It examined specific factors for rising tax evasion and establishing
mechanism to curb the problem. The study was conducted in Tanga tax region. Data
were collected through documentary analysis, questionnaires and interviews.
Quantitative data were analyzed by means of descriptive statistics using SPSS
programme. Qualitative data were subjected to content analysis.
The findings showed that the amount of tax collected in Tanga tax region from 2011
and 2013 did not meet the target of tax collection as it was expected. Many factors were
associated with tax evasion problem namely high tax rate, complexity of tax laws
systems and procedures, taxpayer’s perception towards government ability to utilize
tax collection for social welfare, limited resources and capacity of tax administration,
low literacy and lack of tax education, poverty and nature of business/ production, the
legal provisions in Tax and a low tax Morality. The study also found that in order to
overcome tax evasion Tanga tax region should provide more powers of access to
information, opportunities from voluntary disclosure, prosecution and imprisonment of
tax offenders and publication of tax offenders.
Based on the findings and analysis on the data, it can be concluded that there is a many
factors for rising of tax evasion and its impact on the economy is high in Tanzania and
Tanga tax region in particular. The government must focus in the education of citizens
as an instrument to guide them to best understanding to the tax laws and the role of tax
in enhance and flourish the society. The level of income must be taken into account.
Furthermore, the government must pay more attention about the tax officials, by
enhance their salaries, and implement sufficient incentive systems. In addition, tax rate
must be at a reasonable level which does not overburden taxpayers, whether individuals
or entities. The study recommended among others that the current tax procedures, law
should be amended to provide for establishment of a professional and independent tax
tribunal that could hear matters of fact and law in relation to the assessment under
appeal.