Abstract:
Tax payment compliance found to be a challenge to most of the countries in the
world. Individuals and business use different ways both illegal (tax evasion) and
legal (Tax avoidance) to either reduce their tax burden or not to pay tax at all.
Tanzania is also affected by tax compliance issues as well 35% of the 2012/2013
Government budget depends on loans and grants. Understanding the factors that
influence taxpaying behavior in our economy will help the government to come up
with the policies which will increase tax revenue and hence reduce Budget
dependence ratio.
This study aimed to explore taxpayers’ and tax official’s perception on the perceived
factors that influence tax payment compliance and their impacts to the taxpaying
behavior in Tanzania. The study was conducted in Dar Es Salaam City of Tanzania,
based on a survey of four strata each with 25 respondents which means the sample
size for this study was 100. Both primary and secondary data were used in this study
where questionnaire, survey and documentary review were used as the key research
tools. Frequency distribution tables, histograms, charts and other statistical analysis
have been employed in presentation and analysis of the collected information.
The findings from this study indicates that the major factors which influence tax
payers compliance are corruption, High tax rates, Credibility of Tax Agency and
Government spending. Other factors such as Tax audit, complexity of tax returns and
punishment had slight effect to tax compliance in Tanzania.
Basing on the findings of this study, the researcher recommends the government to
make a thorough review on the existing tax rates, ensure that Government revenue is
properly managed and spent to the items with direct benefit to the society, Give more
weight to fight against corruption and ensure that the credibility of our Revenue
Authority is improved. These will help to increase Tax payments compliance in our
Economy. For other Researchers I recommend to conduct a study on ‘What
contributes to High corruption in Tanzania” because corruption happen to have very
strong influence on Tax payment compliance in Tanzania.
