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ABSTRACT

This study assesses the impact of tax audits on taxpayer compliance in Tanzania, specifically in the Kinondoni Tax Region. Findings indicate a significant relationship between early tax audits and increased compliance, while challenges such as insufficient audit staff and a competitive business environment affect compliance rates. The study recommends that taxpayers recognize the risks of non-compliance and adhere to tax obligations to avoid penalties.

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33 views2 pages

ABSTRACT

This study assesses the impact of tax audits on taxpayer compliance in Tanzania, specifically in the Kinondoni Tax Region. Findings indicate a significant relationship between early tax audits and increased compliance, while challenges such as insufficient audit staff and a competitive business environment affect compliance rates. The study recommends that taxpayers recognize the risks of non-compliance and adhere to tax obligations to avoid penalties.

Uploaded by

rweyemamumethod1995
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSESSMENT ON THE IMPACT OF TAX AUDIT

TOWARDS TAX COMPLIANCE IN TANZANIA

The Case of Kinondoni Tax Region

By

Victor Rweyemamu Method

A Research Report Submitted in Partial Fulfillment of the Requirement for


the Bachelors’ Degree in Customs and Tax Management of the Institute of Tax
Administration

July, 2021
ABSTRACT

This study aimed to assess the impact of tax audit towards taxpayer compliance in Tanzania. The
study adopted the case study design, where the data analyzed using Microsoft Excel. The findings
revealed that, there is a significant relationship when the government takes the action of early tax
audit to taxpayer targeting to reduce penalties, interest and fine. Tax audit also has great significant
in encouraging taxpayer to comply with tax laws, rules and regulations. It is significant for the
responsible authority to ensure that tax audit is undertaken under the planned time to ensure tax
payers are complying with tax audit. Further, the study the researcher asked the taxpayers to
provide their understandings on the challenges which are facing tax authority in conducting
auditing process. It was found that, it is not collect that there is insufficient number of staff audit
departments which are responsible for tax audit. The staff auditor staff is enough to assist the tax
payers pay all required taxes. The study revealed that the tax auditors have good intention to help
the government in collecting taxes, but the challenge starts when the financial statements show
that tax payers are required to pay large amount. Low tax knowledge among tax payers is not the
main challenge facing tax authority in conducting auditing process, it was found that the authority
play their major role in educating the tax payers to ensure that they pay all required taxes. It was
revealed that, among the factors for non-compliance is when the business environment is very
competitive hence low income is not paying tax relief. The tax payers are aware that non-
compliance to tax audit is the risk for their business, what they need to have attractive policies. It
was revealed that, it is insignificant that the punishment for avoiding paying tax is minimal
compared to the available chance of being caught. This indicates that, the government responsible
authority is well functioning to ensure that taxpayers are paying taxes depending on their business
income. The study recommended that, taxpayers need to understand that, non-compliance to the
tax audit may lead to business risks, hence to avoid penalties and other obstacles, they have to pay
taxes timely to ensure the government get all required revenues.

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