Role of Digital Tax Filing System on Tax System Engagement and Taxpayers’ Compliance Burden in Tanzania.

Milamo, Rufina Justine (2024) Role of Digital Tax Filing System on Tax System Engagement and Taxpayers’ Compliance Burden in Tanzania. Doctoral thesis, The Open University of Tanzania.

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Abstract

This study aimed to assess the role of digital tax filing system on system engagement and tax compliance burden in Tanzania through adapting Delone and Mclean Information System (IS) Success Model. Digital filing of income tax return was introduced in 2020, no statistical evidence on whether the system relieve taxpayers from tax compliance burden. Data were collected using the survey strategy from 410 entities that filed returns through the digital tax filing system since 2020. Stratified random sampling techniques were applied to obtain representative samples that were tested and analysed using Partial Least Square Structural Equation Modelling. The results indicated that trust is a significant predictor of tax system engagement, meanwhile tax system engagement significantly contributes towards reduction of the tax compliance burden and the effect size is high. The results of the moderation analysis suggested that tax education significantly strengthen the relationship between tax system engagement and tax compliance burden. Thus, trust, system engagement and the moderator tax education are key contributors to reduction of tax compliance burden for less experienced taxpayers. The study makes important theoretical contribution by introducing new variables (trust and tax education) to the model and confirming the Delone and Mclean IS model for assessing success of digital system. Empirically, the study extended the model to entities and compulsory environment, practically confirming the role of trust, system engagement and tax education to tax agencies. This study recommends future research on the same after full development of Integrated Domestic Revenue Administrative System, and theory integration. Keywords: Digital Tax Filing System, Tax compliance Burden, Taxpayers, Tax education, Trust.

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