Abstract:
Tax revenue is the main source of income to the government and it give the needed money on funding
various government spending. regardless it important of the tax to any National, the amount of tax
collected by the revenue authority, to a large extend, it will depend on the level of taxpayers’ willingness
to comply with the tax law and regulation. Study aims to identify the relationship between taxpayer’s
perception on government spending and their compliance to pay tax. Descriptive design was adopted
and data were collected from 133 SME’s who were randomly selected at Arusha region from population
of 200 so that see SME’s perception toward government spending in relation to tax compliance. Data
were analyzed by thematic analysis and repeating of answers pay attention. The finding shows that,
when there is transparency and proper utilization on money collected through payment of tax then SME
comply with tax law. The study recommends that TRA should continuou facilitate and giving education
in order to make easiness of complying with tax law in Tanzania
