SMEs taxation in Tanzania: tax administration and compliance challenges

This work studied small and medium-sized enterprises taxation in Tanzania, focusing on tax administration and compliance challenges. Specifically the studied aimed at delineating challenges facing Tanzania revenue authority in collecting taxes from the SMEs sector and those facing SMEs taxpayers. It also aimed at identifying approaches for addressing such challenges so as to enhance tax revenues without hampering SMEs business growth. To achieve its objectives this research work adopted a qualitative research approach, employing the interview method in order to obtain in-depth information about the research problem and data were analysed using content analysis method. Purposive sampling was used to select TRA management officers to comprise focus groups and to select executives of SMEs taxpayers associations so as to obtain pertinent information. Cluster sampling was used to divide Dar-es-Salaam region into business centres and taxpayers into business industries. and probabilistic random sampling to select taxpayers to be interviewed. It was established that both TRA and SMEs taxpayers encounter various challenges relating to informality, taxpayers’ ignorance and complexities of the taxation system. The study also established various ways used to address such challenges. It was finally concluded that SMEs taxation environment in the country was not conducive and thus recommended various fiscal and financial policy reviews and efforts geared at improving relationships with SMEs taxpayers in order to foster a favourable SMEs taxation environment in the country.