Assessment of the Taxpayer Compliance Strategies Used by Tanzania Revenue Authority

ATL-Editor 5 December 2019

Paper by: Tshepo Banda

Tanzania has made considerable investment in legislative tax reforms, taxpayer education programs, tax enforcement strategies, and increasingly sophisticated systems of tax administrationTax authorities are fundamental institutions within government frameworks, overseeing tax assessment, collection, and administration. Their operations ensure that tax laws are enforced and public funds are collected efficiently. This article delves into tax authorities' purpose, responsibilities, and structure, offering insights into their essential role in supporting government functions and economic stability. What is a Tax Authority? A tax authority is... More using new technologies. However despite all these initiatives, Tanzania still experience high levels of non compliance, as evidenced by the tax gap. Currently total revenue collected stands at 15{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of GDP. This is low by both regional and international standards. This paper explores the taxpayer compliance strategies used by TRA and the challenges and constraints in implementing the said strategies. Inductive approach was used in explaining the relationship between compliance strategies and compliance behaviour. Embedded case study of TRA’s compliance function was undertaken. Primary and secondary data were collected through interview schedule and content analysis instruments respectively. Judgemental sampling was used to select the sample for the study.
The results showed that TRA is employing both enforcement and voluntary compliance strategies; however voluntary compliance strategies were contextualised to TRA only, impairing the effectiveness of these strategies. The recommendation made is that taxpayers rights must be adequately entrenched in tax lawsTax laws form the backbone of any nation’s revenue system, setting the rules that govern how individuals and corporations contribute financially to support government functions. These laws define the types of taxes, the applicable rates, and the regulations regarding payment and compliance. They also outline the rights and obligations of taxpayers, ensuring a balanced and fair approach to funding public... More, so that taxpayers get the benefit of enforcing them should the need arise. Undoubtedly there are lessons to be learnt from studying best practice in developed economies.

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Categories: Africa, East Africa, Tanzania

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