Factors Influencing Tax Compliance Among Smes In Dar-Es-Salaam

ABSTRACT

The study sought to establish the factors influencing tax compliance among Small and Medium Enterprises (SMEs) in Dar es Salaam. Tax is an important stream of revenue for government‟s development projects and therefore all efforts must be made by the governments to ensure that it accurately and efficiently collects revenues so as to facilitate its operations. Specifically, the study establishes the level of tax compliance among SMEs in Dar es Salaam. The researcher outlined a detailed literature review and identified the variables for this dissertation to be Tax Education, Tax Knowledge, Size of SMEs, Tax Attitude, Tax information, Tax Enforcement and Tax Compliance. The research was a descriptive survey. With regard to SMEs‟ attitude as a factor influencing tax compliance, the respondents agreed and tell that they were having access to public utilities which were made available by the taxes paid to the government; hence they were enjoying the benefits of the taxes they were paying. The findings of the study revealed that lack of tax information relating to tax compliance matters accounted to a great percent as a reason for non-compliance. However, the taxpayers strongly agreed that the taxation system in Tanzania was in great need of improvement. By gaining an understanding of these underlying factors, TRA and as a result, the government will be able to make changes that will greatly improve taxpayers‟ tax compliance level, with the end result being increased government revenues, allowing the tax authority to give quality service to taxpayers and the government as a whole providing more and improved utilities to the public.

KEY WORDS: Tax Knowledge, Tax Education, Size of SMEs, Tax Information, Tax Attitude and Tax Compliance.