Tanzania revenue authority tax audit units: does it promote voluntary tax compliance? A case of Mwanza tax region
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Date
2014
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Publisher
Mzumbe University
Abstract
The collection of tax revenue from the public in low-income countries is very difficult because of low voluntary tax compliance (Coolidge 2010). Hence, tax revenue collection is costly, involving heavy enforcement measures such as use of fines, penalty and sometimes employing court brokers in collecting tax arrears. On ensuring effective and efficient tax collection Baurer (2005) believes that the tax audit services must provide an even playing field for business by ensuring that all taxpayers meet their tax filing and paying requirements. This study assess if tax audit units do promote voluntary tax compliance at Mwanza Tax Region (MTR). The sample size of 120 respondents was purposively selected from the list of taxpayers available at MTR. The study utilizes interview and questionnaire methods to obtain primary data from respondents. However, secondary data were obtained through use of documentary review such as published and unpublished reports of MTR. Descriptive analysis was conducted to enable the researcher to summarize the collected data and organize in a way that the researcher was able to answer the research questions. The use of different tools like tables, graphs and percentages or means will be utilized, also where necessary further analysis was conducted. The findings shows that tax audit unit do provide advanced rulings to explain tax consequences of the proposed transactions to taxpayers mean of 1.59; Tax audit units do assist taxpayers in detecting and deterring non-compliance for taxpayers mean of 1.61; The business enquiries addressed by business auditors to taxpayers the results shows mean of 1.66 which mean the statement has been agreed. The causes for non-compliance by taxpayers at Mwanza are; business activities are now very competitive hence low income so not paying tax gives relief; it’s better to take the risk as its minimal to be detected; the system of tax payment is unfair in all grounds e.g. tax rates, incentives and inequity; it requires too much time to complete tax returns, and the paid taxes are not used properly so not paying tax become an option all these factors scored the mean less than 1.5. tells us that the independent variables (tax audit unit services) can account for 10.2% (0.102) of reported sales. That is to say, in other words, only 10.2% of reported sales can be influenced by tax audit unit services. Therefore the study concluded that tax audit unit services have significance effect to the reported sales by tax payers. The β value is 0.035 which proves there low positive relation as the value of R 2
Description
A dissertation submitted in partial fulfillment of the requirement for the award of the degree of Master's of Business Administration in Corporate Management (MBA-CM) of Mzumbe University
Keywords
Tax audit, Collection revenue, Compliance, Firm
Citation
APA