Determinants of income tax compliance among small businesses in Tanzania

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Date
2011
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
This study was carried out to establish the factors which determine income tax compliance among small businesses in Tanzania, as the voluntary compliance is still a problem in our country. A survey was conducted to 50 small business owners and 10 TRA officers and an in-depth discussion was done to 4 TRA officers, all in Dar es Salaam Secondary data was collected through TRA Tax Revenue and Annual Reports. Data was analysed using the SPSS analysis technique. According to this study tax education was identified as the main determinant of income tax compliance among small businesses. Other factors mentioned as highly influence voluntary compliance were tax rates, tax system, and faith on government spending. Tax education and tax rates were rated high by small business traders while tax system, faith on government spending, and again tax education were rated high by tax officers. According to the results however, other factors including compliance costs and enforcement of regulations were rated as having less influence on voluntary compliance compared to the above-mentioned factors. The implication of the findings to TRA is the need to disseminate tax education to small traders and ensure useful tax information reaches them. Small traders need to value tax education and put some efforts in following up tax issues. 'Be implications to policy makers is a need to review presumptive tax rates to ease the burden of tax, also to improve the tax system to make it business friendly. Further, the government need to ensure the revenue from tax collection is used for the benefit of the citizens.
Description
Available in print copy
Keywords
income, tax, businesses
Citation
Kibasa, E.M.(2011) Determinants of income tax compliance among small businesses in Tanzania. Master dissertation, University of Dar es Salaam. Dar es Salaam.