The Effect of Tax Compliance Cost on Taxpayer’s Voluntary Compliance in Tanzania

This study examined the effect of tax compliance cost on taxpayers ‘voluntary tax<br>compliance in Tanzania, to attain this objective, qualitative and quantitative<br>research approaches were used. A cross-sectional survey research design<br>technique of data collection method was used. Both primary data and secondary<br>data in the form of interviews, document reviews, and surveys were used.<br>Questionnaires were used as a tool for collecting data, and systematic and<br>unsystematic random sampling, as well as purposive sampling, was used. This<br>study drew a sample size of 99 small and medium taxpayers from a population of<br>12,670 small and medium taxpayers who are registered in the Dodoma Region.<br>The results showed that when the taxpayers’ compliance cost is very high and<br>causes a decrease in taxpayers’ voluntary compliance, the cost of taxpayers’<br>compliance including monetary cost such as consultancy cost and tax audit costs,<br>psychological cost as well as time cost still challenge the taxpayers and lastly the<br>high taxpayers’ compliance cost causes non-tax compliance. This study<br>recommended that the Tanzania Revenue Authority (TRA) should reduce the<br>costs associated with taxpayers’ voluntary compliance as much as possible by<br>simplifying the procedures of paying taxes, Also, the study recommended that the<br>responsibility of combating these costs both to the government and the taxpayers.<br>The study concluded that the high taxpayers’ compliance cost causes non-tax<br>compliance.