Additionally, the tax administration capacities for developing and transition governments are usually weak may be due to poor technological infrastructure.
Lubua points out that voluntary tax compliance is very important in the whole process of tax administration in Tanzania. However, while the shadow economies of developing countries are characterized by low capital intensities, small scale of operation, traditional technologies, and often low profit margins; unsanctioned production in transition economies is more often done in big enterprises Stiglitz; Tax payment is constitutional obligation of the citizens, but bad behavior of the government officials can enforce tax payers to shift to shadow economy.
Tax revenues guide national government development and also are used to finance substantial part of government operations including provision of public social services Jamala et al; SinceTanzania has been implementing fairly comprehensive tax reforms as part of widening economic reform program to bolster growth and achieve sustained macroeconomic stability low inflation, prudent fiscal stance, stable exchange rate and favorable balance of payments position.
Also, collection of government revenue can be improved by considering operations of Small and Medium Enterprises SMEs. In a decentralized system, citizens are easily ready to pay tax given the idea that they can enjoy directly benefits of tax but it is otherwise for centralization system.
Their study revealed that effective enforcement machinery is very significant in increasing tax revenue. Also, institutional arrangement of the public governance can affect tax morale as well. Effective tax administration is a key machinery of tax revenue collections in both developed and developing economy.
The efforts of collecting tax revenues cannot be achieved unless there is strong tax administration which ensures proper tax collections and minimizing or engulfing tax evasion.
Reforms on the fiscal front have focused on improving revenue administration, reducing of tax rates, simplifying the tax structure, introducing value added tax and broadening of the tax base.
In an attempt to address the challenges of tax administration on collecting government revenue in developing countries, Abiola and Asiweh examine tax administration focusing on its crucial role of reducing tax evasion. Ideally, such measures should be combined so as to maximize their effort on tax compliance and maximizing government revenue.
For example with reference to developing countries, Daude, Guterrez and Melguizo explain that tax morale is driven by age, religion, gender, educational level and employment status.
The Role of Tax Morale in Tax Compliance and Tax Collections Tax morale is one of the key factors which determines the level of compliance for tax collections in most developing countries Sa, Martins and Gomes; Following this contention, the idea of raising tax awareness to tax payers is inevitable Sumartaya and Hafidiah; and for sure this strategy can help to fight against tax evasion.
In a nutshell, when thinking about the improvement of tax collections, tax morale and tax compliance should be in a forefront of the whole mechanism of tax administration. The trend of tax collections is very appealing, showing a remarkable increase of tax revenue for all six years of analysis but TRA need to put more effort in order to improve government revenue.
In spite of these reforms, Tanzania still has a relatively low tax to GDP ratio, which lies considerably below average for sub-Saharan Africa.
Improving tax compliance is not the same as discouraging noncompliance. Download kB Preview Abstract This thesis studies the changes in the formal educational policies in Tanzania from independence until the present.
For all these to be achieved, Tanzania needs strong tax administration equipped with tax awareness to tax payers, tax morale and voluntary tax compliance. It is a motivational behavior of paying taxes as a civil constitutional obligation Torgler, Also, Levin and Widell reported that tax evasion on imported goods is higher in Tanzania as compared to Kenya.
The study revealed that tax compliance is influenced by awareness of tax laws, business experience, integrity of employees and training needs. Z and Ichis, K.
Johns Hopkins University Press.Causes of SME Failures in Tanzania 1. Characteristics of SMES Some characteristics suggest that SMEs are yet to adopt some modern business standards and practices.
For example, there is personal ownership and management of enterprises which makes SME owners unable to differentiate between their businesses and their personal properties.
about - tanzania sme business toolkit Small and medium-sized enterprises (SMEs) are considered to be one of the principal driving forces in economic development. Introduction to Korean SME Supporting Policies and Programs Joon-Ho LEE ([email protected]) SME is defined as an enterprise with less than employees (manufacturing, mining, construction, transportation, etc.) Focus of Current SME Policy Introduced the concept of competition Selective Financial Policy.
SME policy of Tanzania () indicates that Tanzania has been in the constant move to build and support SMEs for job creation and income generation activities. Despite the ongoing reform programs for economy in Tanzania, SMEs face challenges for international marketing standards.
1 Tanzania – Environmental Policy Brief∗ June 16, This Environmental Policy Brief was developed as a point of departure for a discussion of. The Small Medium Enterprise (SME) sector has been identified as an important strategic sector in the overall policy objectives of the Government of Sri Lanka (GOSL) and it is seen as a driver of change for inclusive economic growth.Download