Abstract:
Tax compliance refers to the degree to which taxpayers adhere to tax laws and regulations
by accurately reporting income, claiming correct deductions, and paying taxes owed in a
timely manner. The study examined factors affecting tax compliance among Small and
Medium Enterprises in Tanzania. The following objectives were employed; to assess the
impact of tax knowledge on tax compliance among SMEs in Kinondoni municipal, to
evaluate the effect of tax system complexity on Tax compliance among SMEs in
Kinondoni municipal and to assess the influence of enforcement measures on tax
compliance among SMEs in Kinondoni municipal. The study employed quantitative
approach, with a descriptive research design. Sample size for the study included 88
registered SMEs respondents within Kinondoni tax region, Dar es Salaam. Data was
collected though questionnaires, whereas analysis involved simple descriptive statistics
for frequencies, percentages, mean and standard deviation. From the findings, it was
revealed impact of tax knowledge on tax compliance among SMEs in Kinondoni
municipal had an average mean of 4.10 denoting that respondents highly agreed that there
was a strong impact of tax knowledge on tax compliance among SMEs. Also, the results
provided that the effect of tax system complexity on tax compliance among SMEs had an
average mean score of 4.15, this indicates that a large number of respondents approved
that there was an effect of tax system complexity on tax compliance among SMEs. Lastly,
the findings established that influence of enforcement measures and tax compliance
among SMEs in Kinondoni municipal recorded an average mean score of 4.05 which is
comparatively to other provisions, indicating that enforcement measures relatively
influence tax compliance among SMEs. Based on the foregoing findings, the study
recommends that Tanzania Revenue Authority (TRA) and local government bodies should
implement comprehensive tax education programs tailored for SMEs. These programs
should cover basic tax principles, filing procedures, and the importance of tax compliance
for economic development.
