Unlocking Tax Compliance: Key Factors Influencing SMEs in Ubungo Municipal Council, Tanzania

Abstract

This study examines the factors influencing tax
compliance among Small and Medium Enterprises
(SMEs) in Ubungo Municipal, Dar es Salaam,
Tanzania. Using a cross-sectional research
design, data were gathered from a sample of 150
SME owners through structured questionnaires.
The study employed probability sampling,
specifically simple random sampling, to select
participants. Key findings indicate that older
businesses and married owners are more likely to
comply with tax obligations, while perceptions of
corruption negatively impact compliance.
Although higher education had a marginal effect,
better access to tax services and a positive attitude
towards taxation significantly contributed to
compliance. The study also highlights challenges
such as bureaucratic hurdles, corruption, lack of
awareness, unfriendly tax administrators, and
issues with Electronic Fiscal Devices (EFDs).
Recommendations include enhancing tax
education, streamlining tax administration,
combating corruption, improving access to tax
services, addressing technological challenges,
and building trust in the tax system.