Abstract
Purpose of this study was to assess the impacts of tax administration on government revenue in Tanzania- case of Dar es Salaam region. This study is more scientific and effective, whereby questionnaires have been used to access the required information. Researcher has been able to collect information from 85 respondents out of 100 targeted respondents from the area of the study. Findings of this study have been analyzed and reveal that, Good tax design, Effective tax policy and laws, Tax administrative structure, Tax collection methods, Proper use of computerized system of maintaining taxpayer Register, Outsourcing revenue collections to private tax collectors, Internal and external capacity building, Intensive coordination with other entities and Proper maintenance of taxpayer’s records are the main factors that enhance effective tax administration in Tanzania. It is concluded that Corruption practices on taxation issues, lack of awareness of Local Tax payers, political pressure to relax tax collections, ineffective tax laws and policies, Insufficient budget or funds, High rate of Tax evasion and avoidance, Outsourced revenue retained by Revenue collectors, lack of tax compliance, are the challenges facing tax administration in Tanzania. Also concluded that eradication of the mentioned challenges above effects/results to, Adequate tax collections, Efficient tax system, High tax compliance by tax payers, Attainment of revenue targets, Increase in tax bases and declined cost of revenue collection, Minimum Tax evasion and avoidance, and High service delivery capability are the impacts that result from Tax administration. Researcher has recommended for the following to be done on the way forward:-Emphasis has to be put on the tax laws and policies mechanism to be reviewed time to time in order to save the purpose due to the prevailing situation, international tax environments, and the changes on the technology on tax administration. Efforts should be put on improving the tax payer’s convenience in the assessment and payment process whilst at the same time entrenching effective and modern human resource management practices in the tax authorities in respect to vetting, recruitment and selection of employees. Tax collection Authorities should ensure that all revenue receivables are paid promptly into designated bank accounts and failure to do so within the stipulated period of time should attract to the severe penalties to the officers concerned.
Highlights
In most developing countries, tax administration has been the critical and most important aspect in ensuring that there is enough revenue for the operation of the government
While there are various studies on tax administration performance, a study which holistically analyses the impacts of tax administration on government revenue in Tanzania is lacking in the literature
The efficiency of the tax system is determined by both appropriate legal regulation and the efficiency and integrity of tax administration
Summary
Tax administration has been the critical and most important aspect in ensuring that there is enough revenue for the operation of the government. Various measures have been taken to ensure that people pay taxes to their government and that there is effective administration of tax to ensure enough government revenue. Drawing from most developing countries, Tanzania depends heavily on tax as a key source of government revenue. The government has focused itself on raising revenue from a limited number of sources. Despite the good initiatives of the government, experience in the past years indicates that government’s seemingly good plans have never successfully generated resources to meet its anticipated national targets and still it has a relatively low tax to GDP ratio, which lies considerably below average for sub-
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