Challenges of Voluntary Tax Compliance in Zanzibar: a Case Study of Chake-Chake Town Area.

Hemed, , Hafidh Salehe (2020) Challenges of Voluntary Tax Compliance in Zanzibar: a Case Study of Chake-Chake Town Area. Masters thesis, The Open University of Tanzania.

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Abstract

The study assessed challenges facing voluntarily tax compliance conducted in Chake-Chake town area in Pemba Island. The study was guided by three specific objectives namely; determining the role of taxpayer’s knowledge, trustworthiness and taxpayer’s perception towards government spending on voluntary Tax compliance. Sample of 162 tax payers registered from TRA and ZRB were chosen by the use of stratified and simple random sampling. Data were analyzed by descriptive and inferential statistics. The study found out that low tax payers’ knowledge, low trust to tax authorities and uncertain perception of tax payers to government expenditure of collected revenue were some of the challenges facing voluntary tax compliance in ChakeChake town area in Pemba Island. The study recommends improvement of tax payers’ knowledge, tax capacity building program to tax payers such as; to conduct seminars and workshop to tax payers on the importance of paying tax for national building, tax policy, laws and regulations; distribution of user friendly information, education and communication (IEC) materials, establish fair and equitable tax system, build harmonious relationship between tax the parties and avoidance of favoritisms and corruption practices when carrying out tax obligations. Similarly tax collection procedure should be more flexible, transparent and with a sense of humanity; and government should account for the use of public monies to the community such that, transparent mechanisms are set for the use of public monies. Similarly, government should consider first track service which directs impact tax payers including water, heath, infrastructure, education and social protection. Keywords: Tax, Tax Compliance, Tax avoidance, Tax evasion & Tax knowledge.

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