Psychological determinants of voluntary tax compliance among small and medium taxpayers in Tanzania

The general objective of this study was to assess psychological determinants of voluntary tax compliance among small and medium taxpayers in Tanzania. The study had three specific objectives, which were to assess the influence of attitude, motivation and equity of tax system on voluntary tax compliance among small and medium taxpayers. An analytical cross-sectional study was conducted in two districts, namely Moshi and Hai in Kilimanjaro region. Data were collected using questionnaire for a sample of 320 participants. Data collected were analysed using SPSS software through univariate, bivariate and multivariate analysis to test the relationship between psychological determinants and voluntary tax compliance. The findings from the study indicated that with exception of attitude factor, which showed evidence of insignificant association with voluntary tax compliance, motivation and equity of tax system has evidence of significant association of voluntary tax compliance among small and medium taxpayers. In order to ensure effective voluntary tax compliance, the study recommends that the revenue body should carry out massive sensitization to increase public awareness. Also, the government should also make the taxpayer feel and understand that they are not paying unfair share of tax. Moreover the study recommends that, TRA should have a comprehensive plan of nurturing and enhancing personal norms, which will make taxpayers to pay willingly more than they are doing today. To enhance tax compliance behaviour, TRA should establish a good relationship with all stakeholders through vigorous public relations such that the negative attitude which people have is eliminated.