Abstract:
This study examined the impact of tax policies on investment decision-making in
Tanzania, focusing specifically on Moshi Municipality in the Kilimanjaro Region. The
research aimed to achieve the following objectives: To assess the Value Added Tax
(VAT) policy towards investment decision-making in Tanzania; to evaluate the
corporate tax policy towards investment decision-making in Tanzania; and to explore the
income tax policies' impact on investment decision-making in Tanzania. The study
employed a qualitative research design, grounded in interpretivism philosophy, which
emphasizes understanding participants' perspectives and experiences. A purposive
sampling technique was used to select participants, ensuring representation from various
stakeholder groups, including investors, tax officials, and financial analysts within the
Moshi Municipality. Data were collected through semi-structured interviews and focus
group discussions. Thematic analysis was utilized to identify key themes and insights
related to the impact of tax policies on investment decisions in quantitative part the
regression analysis was employed to analyze the impact of tax policies on investment
decision. The findings revealed that the VAT policy significantly influences investment
decisions, with investors highlighting its complexity as a barrier. Corporate tax policies
were perceived as critical, with competitive rates fostering investment attraction, while
high-income tax rates were associated with discouraging potential investors. The study
concluded with recommendations for tax policy reforms, emphasizing the need for
simplification of VAT processes, competitive corporate tax rates, and a balanced
approach to income taxation. By addressing these issues, the study aims to contribute to
a better understanding of tax policy dynamics and their implications for investment in
Tanzania, ultimately supporting economic growth and development in the region.
KEYWORDS: Value added tax, corporate tax, income tax, investment decision making,
Tanzania.
