Effectiveness of Tanzania revenue authority tax audits in promoting voluntary tax compliance: a case study of Large Taxpayers in Dar es Salaam

The Tanzania Revenue Authority (TRA) is a government agency of Tanzania, charged with the responsibility of managing the assessment, collection and accounting for all central government revenues. In executing its duties from time to time TRA emphsizes on self assessment and voluntary tax compliance and sometimes carries out tax audits to taxpayers. Voluntary tax complance is vital on tax collections as it minimises cost of tax collection and maximises government revenue collections. This paper presents findings on a study that examined the effectivenes of TRA tax audits in promoting voluntary tax compliance to large taxpayers in Dar es Salaam. Also the objectives and motive behind TRA tax audits. The researcher adopted descriptive methodology in the study and 119 stakeholders were interviewed by using questionnaires in Dar es Salaam Region. Data gathered are presented in a tabular form and respective percentages are computed to facilitate the researcher to draw inferences related to the research questions. It has been revealed that the perception of stakeholders namely Taxpayers, TRA Auditors and Tax Consultants on whether TRA tax audits have been effective in promoting voluntary tax compliance to large taxpayers in Dar es Salaam is inconclusive. Some stakeholders perceived that TRA tax audits promotes voluntary tax compliance. However, the same stakeholders when asked on the main objectives of TRA tax audits they believed that it is to mitigate fraud,evasion and avoidance of taxes and is not to promote voluntary tax compliance. The views of the same stakeholders contradict each other and as such it is inconclusive whether TRA tax audits have been effective in promoting voluntary tax compliance to large taxpayers in Dar es Salaam. Thus, one needs to investigate and test the validity and reliability of this study in the coming years if will still be inconclusive or not. However, more specifically, the same study may be carried out by economic sector and to small and medium enterprises. This segmentation of the study may result into conclusive findings.