Influence of Trust, Service Quality and Extrinsic Motivation on E-Tax Filling System and Compliance Burden in Tanzania

Abstract

This study investigates the impact of trust, service quality, and extrinsic motivation on taxpayer’s engagement with electronic tax filing systems, alongside the relationship between system engagement and the tax compliance burden. The study utilized partial least squares structural equation modelling (PLS-SEM). The analysis draws on survey data collected from 230 business taxpayers in Dar es Salaam, Tanzania. The results demonstrate that trust, service quality, and extrinsic motivation significantly drive taxpayer’s engagement with the e-filing system, concurrently reducing the compliance burden. Additionally, the model exhibits robust predictive validity for cases beyond the sampled data. These findings underscore the importance for tax authorities to foster greater taxpayer engagement by building trust and enhancing service quality. The study offers critical insights for optimizing e-filing systems, emphasizing administrative strategies that can improve taxpayer benefits and streamlining compliance processes.