The determinants of tax non compliance on small and medium enterprises in Tanzania

The general objective of this study was to examine the determinants of non tax compliance in Small and Medium Enterprises (SMEs) in Tanzania. The main issue was the increase of number of tax non compliance cases from 1108 in 2007 to 1142 in 2008 which lead to loss of public funds. The study was conducted in Dar es Salaam and coast region. The population comprises of all Tanzanian, taxpayers and TRA officials. This research used both quantitative and qualitative approach whereby the sampling techniques used were random sampling, purposive and stratified random sampling. The sample size was 50 people, The data collection methods used was interviews, questionnaires and documentary reviews. The study use statistical methods in data analysis. The study found that the number of determinants that caused non-compliance of SMEs were low education of tax among the taxpayers specially the current knowledge about tax, low skills of professional competency high tax rates, perception of tax inequity, complexity of tax law, and government spending among the SMEs. The study therefore suggest that the tax authority should work hard to educate the SMEs on advantage of tax compliance in order to improve the SME on tax matter and by being transparent.