Abstract:
VAT non
-compliance has been a major problem in Sub-Saharan Africa, Tanzania being
inclusive. The overall objective of this study was to assess factors affecting compliance with
Value Added Tax in Tanzania with focus to Arusha region. Specifically, the study examined
business owners' attitudes towards compliance with value added tax (VAT), determined
taxpayers' access to information and knowledge about value added tax, and also examined
reasons for non-compliance with tax laws and regulations. This study involved a total of 148
respondents who were tax payers. Data were collected by use of questionnaire. Findings
revealed that Tax payers understood their responsibility for paying due taxes and that deliberate
compliance with VAT was mandatory. Some of the challenges conflicting information from
different sources, electronic VAT system whim was not easy to understand, and confusing
technical details found in the tax laws and regulations. Respondents opined that not filling tax
returns was rot something that should be counted as an offence. Accordingly, they considered
tax evasion not to be a punishable offence. Slightly more than half of respondents indicated nor
reporting all incomes orlying about tax to TRA was an offense but could be understood.It was
concluded that TRA training programs were not yet effective in enhancing tax compliance. Accordingly, TRA lacked institutional capacity to enforce VAT compliance. Some of key
recommendations include the following. TRA should design and offer more effective training
rrams on compliance with VAT to tax payers. TRA should strengthen its institutional capacity
p o g
astl, tax payers should strive to access right information about
t o e n f o r c e V A T c o m p l i a n c e . L y
VAT and
