Determinants of Rental Withholding Tax Compliance: A Case of SMEs in Arusha, Tanzania

Abstract

This study investigated about determinants of rental withholding tax compliance in Arusha, Tanzania. This study used the descriptive correlational design. The descriptive part of the design addressed the first research question while the correlational part addressed the second research question. The sample of the study was 90 drawn from 1,700 SMEs. The study employed a questionnaire as data source. Validity of the questionnaire was established through expert judgment. To ensure reliability of the results, the researcher conducted a pilot study to a small sample of 35 individuals with similar characteristics as the sampled respondents. After data analysis, the pilot study data yielded the Cronbach’s Alpha of above.700. Treatment of data involved mean scores and regression analysis. The study concludes that tax compliance is low among the SMEs in Arusha City. Awareness of compliance benefits is a contributing factor toward effective compliance. Based on the conclusions, the study recommends a serious intervention by providing awareness among the SMEs in Arusha City on the importance of their withholding tax compliance. As revealed by the findings and corresponding conclusions, the awareness will raise the rate of compliance.