ABSTRACT

The study was carried out at Tanzania Revenue Authority, Kilimanjaro region as a case study, in an attempt to find out the tax policies on revenue performance.

In this study revenue collection performance is the measure of government efforts to collect tax revenue as percentage of GDP.

The objective of the study was to investigate the relationship between tax policies and revenue collection performance in Tanzania. To examine advantages of adopting good tax

policies, to establish challenges faced when implementing these policies towards positive or negative revenue performance and finally to propose possible ways to overcome the

challenges faces in implementing tax policies on the revenue performance in Tanzania.

The study adopted both qualitative and quantitative approach in capturing the correct perception and news of the respondents for the successful of the study. The researcher also used questionnaires and interview as survey research technique in gathering data relevant to the study. This design based on a descriptive and explanatory research design with the

aim of identifying the tax policies employed, establishing the revenue collection levels and the relationships between tax policies and revenue collection performance.

Results of the study indicated that revenue collection levels are still low in Tanzania in comparison to selected sub Saharan African countries. It is found out that tax administration

affect revenue performance. Also a large substantial informal sector is found to be playing a

big role in as far as the levels of revenue is concerned in Tanzania.

The recommendations of the study are that the existing tax policies are to be revised to broaden the tax base, simplify the tax structure, abolish of export related taxes. TRA should

be independent to avoid external influence that otherwise would hamper the administration of the tax policies.

The government should also render quality tax payers services, to encour.age voluntary compliance of tax laws, detect and penalize non compliance in effort to improve revenue collection performance.

iThe researcher also recommended that TRA management should ensure numbers of offices are increased in relation to customers for the effectiveness of revenue collection and tax policies implementation.

TABLE OF CONTENTS

Page

Declaration ........................................................................................................................ .

Approval ............................................................................................................................... ii

Dedication ......................................................................................................................... iii

Acknowledgement............................................................................................................. iv

Tables................................................................................................................................. v-

Acronyms ............................................................................................................................ viii

Abstract ........................................................................................................................... ix-x

CHAPTER ONE: INTRODUCTION TO THE STUDY

Introduction ........................................................................................................... .

Background of the Study ..................................................................................... .

Statement of the Problem ................................................................................... .

Purpose of the Study ........................................................................................... .

Objectives of the Study ....................................................................................... .

Research Questions ............................................................................................. .

Scop·e of the Study ............................................................................................... ..

1.6.1 Geographical scope............................................................................................. 3

1.6.2 Content scope ....................................................................................................... 3

1.6.3 Time scope ............................................................................................................ 3

1.7 Significance of the Study....................................................................................... 3

1.8 · Definition of Terms............................................................................................... 4

1.9 Conceptual Framework......................................................................................... 5

CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction .......................................................................................................... 6

2.1 Taxation Policies................................................................................................. 6

2.1.1 Meaning of Taxation............................................................................................. 7

2.1.2 Direct Tax............................................................................................................... 8

2.1.3 Indirect Tax............................................................................................................ 10

Government Revenue Collection Performance ................................................ .

Collection Levels ............................................................................................. .

Tax Administration and Revenue Collection Performance ........................... .

2.5 Relationship between Tax Policies and Revenue Collection

Performance ........................................................................................................ 20

CHAPTER THREE: METHODOLOGY

3.0 Introduction ............................................................................................................ 21

Research Design .................................................................................................... .

Research Population ........................................................................................... ..

Sampling design ..................................................................................................... ..

Sample Size ........................................................................................................ .

Collection methods ............................................................................................. .

Research Instruments ............................................................................................. .

Questionnaire ................................................................................................. .

Interview ......................................................................................................... .

Observation ...................................................................................................... .

Data Analysis and Presentation .......................................................................... .

Data Interpretation ........................................................................................ .

Methodological and Instrumental Triangulation ....................................... .

Validity and Reliability ................................................................................... .

3.8 . Limitations ········································································································•""

CHAPTER FOUR: PRESENTATION, INTERPRETATION AND ANALYSIS OF DATA

4.0 Introduction.................................................................................................................. 26

4.1 Presentation, Interpretation & Analysis of Data .................................................... 26

4.2 Background Information of the Respondents........................................................ 26

4.2.1 Respondent Gender................................................................................................. 26

4.2.2 Effectiveness of Tax Policies .................................................................................. 27

4.3 Positive Impacts of Tax Policies and Revenue Performance................................. 28

4.4 Negative Impacts of Tax Policies and Revenue Performance.............................. 29

4.5 Findings on Tax Policies .............................................................................................. 30-31