Does Citizen's Trust in Government Increase Willingness to Pay Taxes in Tanzania? A Case Study of Mtwara, Lindi and Dar es Salaam Regions

Abstract

This paper examines the citizen's trust in government and their willingness to pay taxes to improve public goods and services in Tanzania. We use logit model to estimate the effect of government trust on willingness to pay taxes on improved public goods/services. Chi square test finds an association between citizen's trust in government and their willingness to pay taxes for improved public good/services. Logit estimations show that an increase of one unit of public service delivery is associated with increase of citizen's trust in the government. Furthermore, we find that taxpayers are dissatisfied with public services/goods provided by the government. Only 43.5% of citizens showed an average satisfaction on public services delivery. The policy implication is that, providing better public services to the society is an effective tool to raise tax revenues in the government.

Keywords: Willingness to pay taxes, Trust in government, logit model