Impact of Government Expenditure on Voluntary Tax Compliance in Tanzania (2005-2020).

Mwacha, Fedinand Valerian (2025) Impact of Government Expenditure on Voluntary Tax Compliance in Tanzania (2005-2020). Masters thesis, The Open University of Tanzania.

PDF - Submitted Version Available under License Creative Commons Attribution. Download (957kB)

Abstract

The word tax is used to describe a compulsory payment made by individuals or entities to the public power (government), where there is no direct return thereto. Taxes are significant for individuals and the nation at large. Few studies conducted on the matter and context of Tanzania did not exhaust specifically to what extent government expenditure impacts voluntary tax compliance. The purpose of this study was to find out the effect of government expenditure on voluntary tax compliance in Tanzania. Specifically, it aimed at assessing the impact of development, recurrent expenditure and adoption of new technology on the voluntary tax compliance. The study was backed up by the fiscal exchange theory along with descriptive research design. Data were collected through the issuance of questionnaires to 400 respondents who are small and medium taxpayers. The results from probit model show that there is statistical significance relationship between government expenditure and voluntary tax compliance. The coefficients are positively related to dependent variable. Regression of variable, F-test found to be 30.456 with p=0.000 indicating that at least one of predictors significantly contributes in explaining dependent variable. Using of government revenue in provision of public goods and services influences tax compliance. The study recommends proper planning of expenditure. Also, sensitization on other factors that affects tax compliance should be made so as to count for their complementarity with government expenditure so as to estimate how should be used together to bring about maximum degree of compliance. Keywords: Government expenditure, voluntary tax compliance, impact

Actions (login required)

View Item