IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 6 2024
DOI: 10.56201/jafm.v10.no6.2024.pg249.261

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Tax Compliance in Tanzania: The Influence of Tax Knowledge and Tax Complexity on Tax Compliance among Selected Small and Medium Enterprises

Rosemary Peter Mwandu, Praygod Chao, Jasson Domitian

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Abstract

This research examines the influence of tax knowledge and tax complexity on tax compliance among selected Small and Medium Enterprises in Tanzania. A cross-sectional research design was utilized, and quantitative data were collected through questionnaires from 150 randomly selected SMEs located in Dar es Salaam, Mwanza, and Arusha regions. The analysis employed the Ordinary Logit regression method, with respondents' age, gender, and education serving as control variables. The findings indicate a positive and statistically significant impact of tax knowledge and the taxpayer's age on tax compliance. Conversely, tax complexity was found to have a negative and significant relationship with tax compliance. This highlights the importance of taxpayers' comprehension of taxation and demographic factors, particularly age, in fostering tax compliance. The study recommends that policymakers formulate simplified tax laws and regulations to reduce complexity. This measure aims to promote tax compliance and enhance government revenue, which is crucial for funding public services and development initiatives in Tanzania.

keywords:

Tax compliance, tax knowledge, tax complexity, SMEs, Tanzania

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