ASSESSMENT OF THE CHALLENGES FACING REVENUE

COLLECTION IN TANZANIA: EVIDENCE FROM TANZANIA

REVENUE AUTHORITY (TRA); MOROGORO
ASSESSMENT OF THE CHALLENGES FACING REVENUE COLLECTION
IN TANZANIA: EVIDENCE FROM TANZANIA REVENUE AUTHORITY
(TRA); MOROGORO

By

Prisely Meena

A Dissertation submitted in Partial fulfillment of the Requirement for the

Award of the Degree of Master of Business Administration ( MBA-Corporate
Management) of Mzumbe University

2013

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 CERTIFICATION

We, the undersigned, certify that we have read and hereby recommend for
acceptance by the Mzumbe University, a dissertation entitled Assessment of the
Challenges facing Revenue Collection in Tanzania: Evidence from Tanzania
Revenue Authority; Morogoro, in partial fulfillment of the requirements for award
of the degree of Master of Business Administration (MBA-CM) of Mzumbe
University.

Signature

-------------------------------------

Major Supervisor

Signature

--------------------------------------

Internal Examiner

Accepted for the Board of School of Business

……………………………………………..…

Signature

----------------------------------------------------------

DEAN/SCHOOL BOARD

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 DECLARATION

AND

COPYRIGHT

I, Prisely Meena, declare that this dissertation is my own original work and that it
has not been presented and will not be presented to any other University for a similar
or any other degree award.

Signature ----------------------------------------

Date ----------------------------------------------

This dissertation is a copyright material protected under the Berne Convention, the
Copyright Act, 1999 and other international and national enactments, in that behalf,
on intellectual property. It may not be reproduced by any means in full or part,
except for short extracts in fair dealings, for research or private study, critical
scholarly review or discourse with an acknowledgement, without the written
permission of Mzumbe University, on behalf of the author.

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 ACKNOWLEDGEMENTS

Many people have contributed a lot to the success of this research. I would like to
extend my thanks to all of them. However, I would like to mention some of them for
their good attention and contribution without which, my success of this research
could be impossible.

First of all I would like to thank my research supervisor Mr. Francis Tutuba for his
kind advice, guidance and supervision that assisted in improving my whole work.

Many thanks should go to all taxpayers and TRA staff (whom I contacted) for their
support during data collection. Also to my classmates whom from time to time were
helpful in whatever case.

Special thanks to my wife Lisbert Adolph for her patience and endurance during my
absence.

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 DEDICATION

This work is lovingly dedicated to my parents Mr. Abraham Meena and Adeline
Meena for their support and encouragements.

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 LIST OF ABBREVIATIONS AND ACRONYMS

CM Corporate management

CTI Confederation of Tanzanian Industries

GDP Gross Domestic Product

OECD Organisation for Economic Co-operation and Development

PAYE Pay As You Earn

SPSS Statistical Package for Social Sciences

TRA Tanzania Revenue Authority

URT United Republic of Tanzania

US $ United States Dollar

VAT Value Added Tax

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 ABSTRACT
Governments world wide need resources in form of revenues to perform various
functions both social and economic activities. Tax is the main source of revenue for
any government and taxes are compulsory payments to government without
expecting direct benefit or return by the tax payer – not based on direct quid pro quo
principle. TRA Morogoro has been facing various challenges which make it not to
attain the projected targets put. For example, in 2011/12 the targeted revenue was
Tsh 21,012,844,999 with the actual revenue being Tsh 20,101,569,981 (equivalent to
95.6% or a difference of 911,275,018). The general objective of the study was to
assess the challenges facing revenue collection at TRA Morogoro.
Case study research design was used in this study. A sample size of 32 out of 90
respondents (i.e. tax payers and TRA employees) was involved. Interview and
questionnaires were used to get information from the respondents. Data collected
were analyzed descriptively by using SPSS computer software.

The findings show that direct taxes as reported by 100% of the respondents were
collected by TRA through the assistance of debt management and compliance section
which are responsible for the provision of guidance to taxpayers. However, 80% of
the respondents reported the availability of taxpayer resistance and low tax morale on
part of the citizenry which resulted into the reduction of revenue collection due to the
availability of low level of tax knowledge by tax paying community. Furthermore,
82% of the respondents argued for the application and enhancement of block
management system to categorize taxpayers in order to facilitate their monitoring
process as to reduce no filers, facilitate collection of arrears and proper assessment
while enabling them pay tax in a cost effective way.

It concludes that improving the citizens’ access to and right to information on taxes
collected and how revenues are spent was vital and needed to be clearly given to the
public in order to avoid the citizens’ feeling that they receive little in return from
revenue paid. The researcher argues for revenue collection capacity enhancement
through staff enhancement and enrichment while facilitating taxpayers with
education and establishing more accessible and transparent payment facilities in
order to minimize revenue leakages.

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 TABLE OF CONTENTS

CERTIFICATION ................................................................................................... ii
DECLARATION.................................................................................................... iii
COPYRIGHT ......................................................................................................... iii
ACKNOWLEDGEMENTS .................................................................................... iv
DEDICATION .........................................................................................................v
LIST OF ABBREVIATIONS AND ACRONYMS ................................................. vi
ABSTRACT .......................................................................................................... vii
TABLE OF CONTENTS...................................................................................... viii
LIST OF TABLES.................................................................................................. xi
LIST OF FIGURES ............................................................................................... xii
LIST OF APPENDICES ....................................................................................... xiii
CHAPTER ONE .....................................................................................................1
INTRODUCTION AND BACKGROUND INFORMATION ..............................1
1.0 Introduction ................................................................................................1
1.1 Background to the problem.........................................................................1
1.2 Statement of problem..................................................................................4
1.3 Research Objectives....................................................................................5
1.3.1 General objective........................................................................................5
1.3.2 Specific objectives......................................................................................5
1.4 Research questions .....................................................................................5
1.5 Significance of the study.............................................................................5
1.6 Scope of the study.......................................................................................6
1.7 Limitations of the study ..............................................................................6
1.8 Delimitations of the study ...........................................................................6
1.9 Organisation of the Study ...........................................................................7
CHAPTER TWO ....................................................................................................8
LITERATURE REVIEW.......................................................................................8
2.0 Introduction ................................................................................................8
2.1 Theoretical literature review .......................................................................8
2.1.1 Definition of Terms…………………………………………………………8

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2.1.2 Types of Revenue.....................................................................................11
2.1.3 Revenue/Tax Collection Requirements .....................................................12
2.1.4 Improving administrative efficiency to reduce collection costs .................12
2.1.5 Importance of tax/revenue to governments ...............................................13
2.1.6 Ways of improving government revenue generation .................................13
2.1.7 Revenue/Tax Assessment .........................................................................15
2.1.8 Strategies for improving Local revenue collection. ...................................16
2.1.9 Challenges in Revenue Collection ............................................................18
2.1.10 Factors motivating people to avoid their tax obligation.............................19
2.1.11 Theories of Tax Compliance.....................................................................19
2.1.11.1 Economic Based Theories ........................................................................20
2.1.11.2 Psychology Theories ................................................................................20
2.2 Literature review from earlier studies........................................................20
2.3 Conceptual framework.............................................................................22
CHAPTER THREE ..............................................................................................24
RESEARCH METHODOLOGY .........................................................................24
3.0 Introduction ..............................................................................................24
3.1 Research design ........................................................................................24
3.2 Study area.................................................................................................24
3.3 Population and sample size .......................................................................25
3.4 Sampling techniques .................................................................................25
3.4.1 Purposive sampling ..................................................................................25
3.4.2 Stratification sampling..............................................................................26
3.5 Data collection methods............................................................................26
3.5.1 Primary data collection methods...............................................................26
3.5.2 Secondary data collection methods ...........................................................28
3.6 Data analysis techniques ...........................................................................28
CHAPTER FOUR.................................................................................................29
PRESENTATION AND DISCUSSION OF THE RESEARCH FINDINGS......29
4.0 Introduction ..............................................................................................29
4.1 Demographic characteristics of the respondents ........................................29
4.2 Types of revenue collected by TRA Morogoro .........................................31

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4.3 Challenges facing revenue collection at TRA Morogoro ...........................34
4.4 Strategies for the enhancement of revenue collection at TRA Morogoro ...37
CHAPTER FIVE ..................................................................................................41
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS .41
5.0 Introduction ..............................................................................................41
5.1 Summary of Findings................................................................................41
5.2 Conclusion................................................................................................43
5.3 Recommendations and policy implication.................................................44
5.3.1 Recommendations ....................................................................................44
5.3.2 Policy Implication ....................................................................................44
5.4 Need for Further Research ........................................................................45
REFERENCES .....................................................................................................46
APPENDICES.......................................................................................................49

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 LIST OF TABLES

Table 3.1: Sample distribution of respondents........................................................25

Table 4.1: Demographic characteristics..................................................................29
Table 4.2: Types of Revenue collected...................................................................32
Table 4.3: Challenges facing revenue collection.....................................................35
Table 4.4: Strategies for enhancing revenue collection...........................................38

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 LIST OF FIGURES

Figure 2.1: Conceptual framework model ............................................................23

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 LIST OF APPENDICES

Appendix 1: Questionnaires ...................................................................................49

Appendix 2: Interview guide questions for the regional manger and head of debt
management & compliance department..............................................53

xiii
 CHAPTER ONE
INTRODUCTION AND BACKGROUND INFORMATION

1.0 Introduction

This chapter provided the assessment of the challenges facing revenue collection in
Tanzania with special reference to TRA, Morogoro branch. It further describes the
background to the problem; states the problem; research objectives and questions; the
significance; scope; limitations, delimitations and organisation of the study.

1.1 Background to the problem

“Will underdeveloped countries learn to tax?” asked Nicholas Kaldor (1963), fifty
years ago. Underlying this question is the assumption that if a country wishes to
become ‘developed’ it needs to collect in taxes/revenue an amount closer to 25-30
percent of GDP than the 10-15 percent found in many developing countries
(Chaudhry, 2010). Governments world wide need resources in form of revenues to
perform various functions both social and economic activities. Such social/public
services include: education, health, infrastructure, security. Tax is the main source of
revenue for any government (Bird et al, 2008). Taxes are compulsory payments to
government without expecting direct benefit or return by the tax payer – not based on
direct quid pro quo principle. Taxes/revenues collected by Government are used to
provide common benefits to all mostly in form of public welfare services.
Taxes/revenues do not guarantee any direct benefit for the person who pays the tax
(Chijoriga, 2012).

Kiser and Baker (1994) argued that tax systems in most poor countries are
characterized by widespread corruption and tax evasion. Substantial amounts never
reach the treasury. This erosion of the tax base has several detrimental fiscal effects.
The consequences of lost revenue to the funding of public services are of special
concern (Tanzi, 2000). In addition, corruption and tax evasion may have harmful
effects on economic efficiency in general and income distribution in particular

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(Chand and Moene, 1999). Furthermore, staff productivity may have changed
possibly due to falling motivation caused by, for instance, declining real wages.
However, there are many indications that an increase in fiscal corruption has
contributed to reducing the growth in reported revenues (Chijoriga, 2012). Extensive
corruption and embezzlement of public funds are documented in a number of reports
from both commercial and official sources (Fjeldstad, 2003). For instance, the
Confederation of Tanzanian Industries (CTI) estimated that the value of lost revenues
from customs and sales tax due to inefficient tax administration and misclassification
and undervaluation of imported goods amounted to more than Tsh 250 billion for the
period March 1993–March 1994 (Osoro et al., 1999). Official statistics on reported
revenue from customs duties also indicate large leakages. While the most commonly
applicable import duty rate was 30% during 1988–1994, the customs tariff generated
a revenue equivalent to less than 6% of the official import value during that period
(Gandhi et al., 1995). Evasion of other types of taxes was also widespread. For sales
tax and excises on domestic goods, underreporting of production volumes was a
common form of evasion (Osoro et al., 1999). With regard to corporate taxes,
underreporting of profits and falsified tax deduction claims were common
(Mwinyimvua, 1996). In both cases, such underreporting could be achieved with or
without the help of staff within the tax administration. For personal income taxes,
including pay-as-you-earn (PAYE), one method used by employers to evade taxes
was not to report.

The corruption scandals in the tax administration were instrumental in President

Benjamin Mkapa’s decision to establish a Commission on the Causes of Corruption
in Tanzania. The commission was appointed in January 1996 with a mandate to map
the extent of corruption in the country and identify steps to deal with it (URT, 1996).
Investigations identified four factors as keys to explaining the extent and types of
corruption pervasive in the Tanzanian tax administration; a) Political intervention.
This generally took place in the form of discretionary tax exemptions granted to
business people who were willing to pay and/or had the ‘right connections’ (URT,
1996); b) High tax rates and complicated regulations. The potential gain from
involvement in corruption could be considerable, both for officials and taxpayers.

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Relatively high rates and a complex and partly incoherent set of rules, especially for
customs and corporate taxes, resulted in large potential rewards for taxpayers willing
to bribe to cut their own tax burden and/or speed up customs clearance of their goods
(URT, 2009). For customs officials, the bribes taken for clearing specific containers
in Dar es Salaam harbour could be as much as a whole year’s salary. In general, the
system gave tax officials considerable discretionary powers; c) Poor pay and working
conditions. The low wage levels at the tax administration compared to the private
sector invited corruption. The average public employee’s salary including allowances
in the early 1990s was sufficient to cover only about 40% of normal household
expenditures (Mans, 1999). Moreover, working conditions are characterised
generally by a lack of technical equipment and poor office facilities, as well as
unclear criteria for recruitment, promotion and rewards (URT, 2009); d) Low
probability of detection and punishment for corruption. Internal auditing and
monitoring functions has become for the most part non-operative and ineffective
(Cunningham, 1996; URT, 2005). According to Cunningham (1996), these auditors
were ‘part of the system and the peer network to be inspected’. Audits were further
crippled by low skills. The auditing staff lacked the training in auditing and
inspection methods, and the required equipment and basic facilities to perform
controls. In practice, the probability of being detected and punished for corruption
has been virtually non-existent.

On the other hand, those working in the informal sector of Tanzanian economy do
not see the need to pay tax whereas they dominate the economy (Chijoriga, 2012).
To them only, civil servants should pay tax on their earnings and this amount to over
flogging the willing horse. Besides, the activities of the strong union in the formal
sector do not even pave way for a successful tax policy implementation in the formal
sector. However, challenges in revenue collection according to Chijoriga (2012)
include; a) Broadening the tax base, informal sector included in the tax net; b)
Ensuring that all due Government revenue is collected and tax evasion and avoidance
are controlled; c) Raising the level of revenue yield to be commensurate with the
average yield achieved in sub-Saharan Africa; d) Addressing stakeholders’
(community’s) expectations by exercising various statutory powers fairly in

3
accordance with the law - without political influence; e) Expediting tax decision
making and rulings by putting in place well established procedures and criteria; and
f) Improving staff integrity. There is no doubt that taxation must have affected the
economic development of Tanzania. Efforts were therefore made in this study to
assess the challenges TRA Morogoro branch face regarding revenue collection with
her tax policies and administration.

1.2 Statement of problem

Many developing countries need to spend more of their tax revenue on public
infrastructure, education, health services and so on, and hence they need to increase
their tax effort – tax revenue as a percentage of gross domestic product (GDP) – if
they want to grow and to be less poor (Bird, 2006). The Tanzania Revenue Authority
(TRA) has been able to increase revenue collections; improve voluntary compliance,
minimize collection costs, widen the tax base, and control evasion and fraud. In
absolute terms, tax revenue collected by the TRA increased from an equivalent of
US$1,575 million in 2004/05 to the current levels of US$3,185 million in 2010/11
while revenue to GDP ratio increased from 10.8% to 15.3 % respectively. The TRA
aims at raising the ratio to 21% (URT, 2012).

Despite the mentioned improvements, TRA Morogoro branch has been facing
various challenges which make it not to attain at most (100%) the projected targets.
For example, in 2010/11 the targeted revenue was Tsh 19,857,847,510 with the
actual revenue being Tsh 18,627,243,684 (equivalent to 93.8% or a difference of
1,230,603,826). On the other hand, in 2011/12 the targeted revenue was Tsh
21,012,844,999 with the actual revenue being Tsh 20,101,569,981 (equivalent to
95.6% or a difference of 911,275,018). Therefore, this study sought to unveil the
challenges facing it in order to come out with strategies for their eradication.

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1.3 Research Objectives

The objectives of this study were divided into two main types, that is; general
objective and specific objectives as itemized hereunder.

1.3.1 General objective

The general objective of the study was to assess the challenges facing revenue
collection at TRA Morogoro branch

1.3.2 Specific objectives

i) To identify the types of revenue collected by TRA Morogoro branch

ii) To identify the challenges facing revenue collection at TRA Morogoro branch
iii) To determine strategies for the enhancement of revenue collection at TRA
Morogoro branch

1.4 Research questions

i) What are the types of revenue collected by TRA Morogoro branch?

ii) What are the challenges facing revenue collection at TRA Morogoro branch?
iii) What are the strategies for the enhancement of revenue collection at TRA
Morogoro branch?

1.5 Significance of the study

The study divulged the facts regarding the challenges facing revenue collection at
TRA Morogoro and alerted all stakeholders to take urgent steps for minimizing the
challenges.

This study will be very important as it will enable users to use empirical knowledge
in different TRA branches and became a reference material for academic endeavours.

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This study is important for the researcher for the fulfillment of Masters degree in
Business Administration (CM) as the requirement of Mzumbe University.

1.6 Scope of the study

The study focused the TRA Morogoro branch employee and various taxpayers in
Morogoro municipality. The study intended to assess the challenges facing revenue
collection at TRA Morogoro branch.

1.7 Limitations of the study

The limitations of the study were as follows;

i) Financial Constraints. The financial support was expected from researcher’s
pocket money which was limited. For that case, the researcher was unable to gather
or collect the whole data from all respondents of the respective area and offices;
hence taking a sample.
ii) Response rate. It was expected that the response rate would be low due to
respondents being in a hurry, very busy with their daily activities and others were not
present at their working place sometimes. However, continuous follow-ups of
respondents made the task to be accomplished.

1.8 Delimitations of the study

The researcher utilized case study research design because of time and cost
considerations in order to examine only a sample of cases while collecting data from
the respondents by visiting them now and then in their areas they worked. However,
the corporation from respondents made the study to be fulfilled.

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1.9 Organisation of the Study

The study consisted of five chapters. The first chapter was the Introduction and
Background Information. The second chapter presented the Literature Review, the
third chapter discussed the Research Methodology, the fourth chapter dealt with
Presentation and Discussion of Research findings and the fifth chapter presented the
Summary, Conclusion and Recommendations.

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 CHAPTER TWO
LITERATURE REVIEW

2.0 Introduction

This chapter reviewed the literatures from different studies in order to capture ideas
and arguments which guided the development of the study. It is based on theoretical
literature review, literature review from earlier studies and conceptual framework.

2.1 Theoretical literature review

2.1.1 Definition of Terms

Tax/revenue is referred to as a chargeable income during a year (Chijoriga, 2012).

However, in order for tax to be paid well voluntary tax compliance practices need to
be emphasized. Voluntary tax compliance refers to self-assessment of a taxpayer on
his/her tax ability and then remit relevant amount of tax to the government
(Fjeldstad, 2006).

Baurer (2005) argued that it is a well known fact that the revenue generated from the
taxation of individuals and businesses is an important stream of income for
government. In an economy like ours that is struggling to remain afloat, it is even
more important. Tax revenue is the source of funds used for development projects
such as provision of infrastructure like good roads, stable power supply, stable water
supply etc. All of which combine to create an enabling environment for businesses –
and in turn the economy at large- to grow. However, Bofah (2003) stated that tax
revenue collection is one significant issue of economic development among others. It
has been said that ‘what the government gives it must first take away’. Because the
economic resources available to society are limited and so an increase in government
expenditure normally means a reduction in private spending. Taxation is one method
of transferring resources from the private to the public sector, but there are others i.e.
creation of more money, to charge for the goods and services it provides or to

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borrow. Taxation has its limits as well, but they considerably exceed the amounts
that can be raised by resorting to the printing press, charging consumers directly, or
borrowing. So while governments often use all four methods of raising resources,
taxation is usually by far the most important source of government revenue
(Chaudhry, 2010). As important as tax revenue is to a nation, many people still find
it difficult to comply with their tax obligation.

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According to Nightingale (2002) “No one really likes paying taxes yet they are
inevitable for the provision of social welfare”.

James and Nobes (2009) and Nightingale (2002) while citing (Smith, 1776) posit that
a good tax should have the qualities of equitability, efficiency, neutrality, flexibility
and simple. These principles still holds today and even act as a guide for policy
formulation. However, the ability to achieve all in a single tax policy is practically
impossible; hence Nightingale (2002) stated that there is no good tax. This is because
an efficient tax might be inequitable. According to Lamb et al (2005) “An efficient
tax may not necessarily be considered fair and one that is considered equitable may
not be efficient”. Ordinarily, people abhor tax payment due to its effect on their
income. Owens (2006) noted that only a few people are enthusiastic about paying
tax. Tax policy must be generally accepted by the people if it must gain compliance
(Nightingale (2002). It therefore means that a good tax system must be in
consonance with (Smith, 1776) cannon of taxation.

World Bank (2002) stated that the tax system in Tanzania is still complicated and
non-transparent. Moreover, Luoga (2002) pointed out that tax legislation is unclear
and causes random and partly ad hoc collection procedures. Assessors are considered
to have wide discretionary powers to interpreting tax laws, for instance, to allow or
disallow expenses or charges or to exempt import duty on items imported. Therefore,
reforms of tax legislation and procedures, including measures to improve
transparency in the taxpayer–tax officer relations, should take place concurrently to
reduce opportunities for corruption and the demand for corrupt services (Luoga,
2002).

Bofah (2003) argued that literacy rate is by far the most important element in success
of tax revenue collection while the backbone of an effective tax system is the
documentation of the economy. Documentation comes from a literate tax base. In the
present day world literacy does not only being able to keep records on books but also
includes knowledge of information technology and its usage. Taxes yield less
revenue in less literate economies. Tax collection requires consistency in

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implementation and consistency in implementation comes with political stability.
Taxes, law and order situation is indirectly related. A country with stable law and
order situation would mean greater investment being brought in, more jobs being
created, resulting in greater purchasing power on the part of the consumers who
effectively have to pay tax. Awareness to the people on the benefits of paying taxes
which increase the tax morale of the people should be brought as long run policy
implication (Bahiigwa et al, 2004).

Garde (2004) observed that the tax incidence model focuses on the equity
implications (or fairness) of alternative local revenue policies. The health of the
tax/revenue system and the consequent quality of service delivery is constrained by a
number of challenges including: (1) the high costs of collection relative to yield for
some taxes; (2) low compliance rates for some taxes; (3) the lack of voice felt by
taxpayers and negative perceptions of service quality, which affect willingness to pay
taxes; (4) the propensity for some employees to ignore central government legislation
in their search for new revenue sources (a dynamic that was documented following
recent tax reforms in Tanzania); and (5) leakage of revenues from privatized tax
collection arrangements, which can introduce wide margins between payment by
taxpayers and yield to authorities (Sarzin, 2007).

2.1.2 Types of Revenue

a) Tax Revenues

These include; Direct taxes such as corporate tax; personal income tax, withholding
tax- rents, management and professions fees, property tax etc and indirect taxes such
as import duty, excise duty (imports and local goods), VAT (imports and local
supplies) and stamp duty.

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 b) Non-Tax Revenues

These include; Fees such as passport, driving license etc; fines and penalties
regarding the breach of law or non-fulfillment/failure; surplus from public
enterprises such as dividends from profits (Chijoriga, 2012).

2.1.3 Revenue/Tax Collection Requirements

Three aspects are considered important to enhance revenue collection process

according to Mahdavi (2008); a) optimum rate structure; b) appropriate rules and
regulations – in the form of good regulations and; c) human resource capacity.

However, to increase control in order to reduce leakage, Garde (2004) advises the
government to perform some or all of the following actions; a) Surprise audit to
complement self-assessment procedures; b) Improving the control process; c) Efforts
to enforce a strict and heavy penalty for non-compliance; d) Administrative
discipline to financial staffs that may have contributed to leakage in revenues; e)
Efforts to link tax payment with services provided by local government.

2.1.4 Improving administrative efficiency to reduce collection costs

Improvement in revenue performance is also critically dependent upon the ability of

authorities to minimize the cost of collecting revenues. There are four possible
actions could be taken by the government to improve their administrative efficiency
according to Levi (2002); a) Improving the existing tax administration procedures
through administrative simplification; b) Efforts to calculate collection efficiency for
each type of revenue; c) Efforts to reduce cost of collection; and d) Efforts to
eliminate the identified factors in the field that has contributed to sub-optimal
revenue.

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2.1.5 Importance of tax/revenue to governments

i) Financing administration costs (e.g. emoluments and employee costs);

ii) Financing maintenance costs and thus promoting ownership of projects;
iii) Permits collection of localized and low yielding revenues;
iv) Guarantees sustainability of service delivery and autonomy of local governments
v) Regulates businesses and provides important infrastructure and services such as
markets and public conveniences at a charge;
vi) Reduces pressure on central governments and reliance on donors;

2.1.6 Ways of improving government revenue generation

Many of the problems facing the generation of revenue in many governments are
those that can be corrected to improve their generation. According to Herbert (2005),
a dependable tax base for the government is essential shortage of trained valuation
staff will make taxes on real property difficult to assess for sometime to come. The
system of graduated tax has been in unjustifiable dispute in recent years. Olaoye
(2008) also suggested the possibility of a Native Authorities’ Loan Authority as an
agency to provide capital loans for the government. However, some of the strategies
for improvements are:

a) Good infrastructure: A location with good road net work will have every access to
the coming and going out by cars and people, if they get to the towns by cars and see
good roads, pipe-borne water, hospitals, schools etc. they may decide to pay taxes.
This will increase the number of people and business that will be paying tax and this
will definitely increase the revenue generation because more people will be paying
tax, if the government can provide good infrastructure for the local government,
there will be more business and people will see reasons to pay tax (Bahiigwa et al,
2004).

b) Staff motivation: According to Henry Fayol (1948), there are fourteen principles
of management of which motivation is among the list. Henry Fayol (1948) however

13
defined motivation as a driving force which stimulates a worker in action workers
should be encouraged so that they can put in their maximum services and when this
is done, there may be increase or solid improvements in revenue collection. Training
of workers for knowledge enhancement should be one of such motivational factors
(Adebisi, 2005). It is fervently hoped that when the above suggestions are fully
implemented, the local government will not only improve internally but also with the
outside world.

c) Establishment of projects: The government should embark on the establishment of

some minimized industries, which will provide employment opportunities to the
people. Foe example, Farm industry has helped to solve some of the employment
problems within the community. There should also be development and
improvement in agricultural ventures like crop farming etc. the participation in
agriculture will encourage the inhabitants of local government to improve their
standard of living (Bahl, 2003).

d) Revenue management: There is a general trend going about most governmental

establishment, there are mis-management and embezzlement. The revenue so
collected are mismanaged by the officer thereby not making the revenue to have any
effect on the general populace of the government. This can be reduced by the
centralization of the collection department and rotation of jobs and assignments. If a
worker is occupying a particular position for a long time he tends to have all the
ways by which he can fraud the department (Baurer, 2005).

e) Loyalty of tax payers: If people can change their attitude of tax evasion, more
revenue will be generated. The number of people that pay up their dues (tax) as at
when due are very small compared to the number of people that are supposed to pay.
If the orientation can change, it will go a long way in increasing the amount of
revenue that will be generated in the government (Bird et al, 2008).

f) Sensitization of the people: This involves informing and educating potential

taxpayers on the purpose and benefits of the revenue they contribute. Governments

14
normally undertake massive sensitization through workshops, newspapers, and radio
stations among others. The sensitizations are spear headed by Local leaders. Massive
and effective sensitization results in sufficient revenue collection hence better service
delivery. Although sensitization of the masses is undertaken, it does not always yield
the desired results. For example some of the tax payers are illiterate and cannot read
newspapers, and yet some radio stations are not listened to by the people given the
fact that some potential tax payers are located in remote areas, some Local leaders
lack the skills of sensitizing the public about revenue collection and its impact on
service delivery. Therefore, this will make revenue collection a bit difficult let alone
the eventual provision of the services to the people (James and Nobes, 2009).

2.1.7 Revenue/Tax Assessment

Assessment is the determination of the amount to be paid in respect of a particular

revenue item and raising a formal notification of the amount to be the basis for its
determination, the due date and mode of payment among other to the tax payer. An
assessment must be based on a clearly defined tax base and must reflect the rates
applicable a tax base. The assessment exercise helps Governments to keep a record
of the amount and due date for payment of the respective revenue items assessed, the
name, location and other details of the taxpayer (Fjeldstad, 2003).

The assessment exercise requires first the identification of suitable assessors and then
training them before embarking on the assessment exercise. A good revenue system
must have a team of well-trained assessors whose main responsibility is to prepare,
raise, and distribute assessments in line with the regulatory and policy framework for
Local and central Government (Gordon, 2010). Effective assessment should put into
consideration the following principles.

a) Ability to pay. This principle has to be exercised in that the taxpayer should be
able to pay the tax assessed on him. The ability to pay is determined by earned
income, disposable income, expenditure, and domestic obligations of the taxpayer
(Fjeldstad, 2009).

15
b) Simplicity. The type of tax, method of assessment and collection must be simple
and understandable by both the taxpayer and the tax collector. Mugume (2006)
asserted that, a good tax should be one which is easy to understand that to say, the
tax payer must be able to know the exact amount to pay and when and how much to
pay without any difficulty. Complicated taxes tend to lead to disputes, delays, and
high collection costs in terms of time and resources. Organizing assessments basing
on the principles ultimately improves on the Local revenue collection hence service
delivery and the reverse is true.
c) Elasticity. This element should exist in assessment under Local revenue collection
to improve on the tax base and taxes should change directly with change in the tax
base and the reverse is true, hence the revenue is generated (Chaudhry, 2010).

2.1.8 Strategies for improving Local revenue collection.

A classical economist Smith (1776) put forward the canons or general principles of
taxation which he said should be observed when imposing a tax, and these are;
equity, certainty, convenience, productivity, buoyancy and economy. These canons if
followed in tax assessment, collection and administration, improve on the Local
revenue collection and administration.

i) Convenience. Under the principle of convenience, Smith (1776) stated that every
tax ought to be levied at the time that it is most likely to be convenient for the
taxpayer to pay. He further said that, both the time and mode of payment should be
convenient. For instance, farmers should be taxed when they sell their crops, office
workers to be taxed when they receive their salaries, traders taxed when they make
profits.

16
ii) Canon of Equity. Under the equity principle, Smith (1776) stated that the amount
of tax burden on taxpayers should be equal or proportional to their incomes such that
the higher the income earners pay more taxes (tax liability) than the low-income
earners. Adam smith’s principle of equity is based on humanitarian grounds. Equity
takes two forms, horizontal equity, and vertical equity. Horizontal equity means that
people in the same income bracket should be taxed equally while vertical equity
means that people in different income brackets should be taxed differently.

iii) Productivity. Tax productivity is the ability of a given tax to generate as more
revenue as possible to the Government. Therefore, a tax should be more effective and
productive as possible. The tax system should yield enough revenue to the treasury,
so that the Local council does not resort to deficit financing (Bird, 2006).
iv) Certainty. The canon of certainty has to be put into consideration in order to
improve on the Local revenue. The taxpayer must be protected from unnecessary
harassment by revenue officials by advocating for the certainty and non-arbitrariness
of the taxes, fees, and charges that each individual is bound to pay. This is because
unpredictable taxes discourage investment and reduce effort of work (Bahl, 2003).

v) Economy. Local revenue collection can also be improved by the principle of

economy. The principle stresses that the cost of collecting and administering taxes,
fees and charges must be much lower than the tax proceeds. The collection costs
should not exceed 5% of the tax. It is meaningless to impose taxes, which are
widespread and difficult to administer as they impose an unnecessary burden upon
the society in the form of additional administrative expenses (Chaudhry, 2010).

vi) Flexibility/Buoyancy. The tax should change directly with the change in tax base.
A tax should be able to change directly with the changes in the economic situations
or incomes or tax bases with the Local administration, for instance if the taxpayers’
incomes rise, even the taxes on them should be able to adjust directly and taxes
should reduce as incomes reduce. The fees/tax structure should be adjustable to the
changing requirements of the Governments with ease; and the Local revenue system
should not be complicated (Smith, 1776).

17
vii) Diversity. It is risky for the Local Government to depend upon very few sources
of Local revenue such as a system is bound to breed a lot of uncertainty for the
treasury. If Local revenues come from diversified sources, then any reduction in a
particular revenue item is bound to be very small, hence the principle of diversity.
However too much multiplicity of taxes should be avoided as it may lead to
unnecessary cost of collection and hence violate the economy principle. Fiscal
authorities should be in position to predict and accurately forecast the revenue a
particular tax will generate and at what rate it will flow in, for this is because
inelastic tax is usually unproductive (Bahiigwa et al, 2004).

However, the various canons of taxation as put forward by Smith (1776) such as
equity, convenience, flexibility, certainty, may not fully help in tax assessment,
collection and administration because of the nature or make up of the Local
Governments. For example, it is difficult to estimate the convenient period of paying
taxes by some people who are in informal sectors. With equity, it might be quite
difficult to determine people who are in the same income brackets because of the
tendency of the tax people to be very secretive when it comes to disclosing their
wealth. Indeed Adam Smith’s principle of diversity may not be appropriate in less
developed economies where by the tax base is low with agriculture as the main
economic activity. It can be asserted that Adam Smith’s principles of taxable can be
more appropriate in developed countries with a variety of tax bases and with a well-
developed database about individuals and their incomes.

2.1.9 Challenges in Revenue Collection

According to Chijoriga (2010) the challenges include;

i) Broadening the Tax base, informal sector included in the tax net,
ii) Ensure that all due Government revenue is collected and tax evasion and
avoidance are controlled.
iii) Raising the level of revenue yield to be commensurate with the average yielded
in other Local Governments

18
iv) Addressing stakeholders’ (community’s) expectations by exercising various
statutory powers fairly in accordance with the law - without political influence.
v) Expediting tax decision making and rulings by putting in place well established
procedures and criteria.
vi) Improving staff integrity.

2.1.10 Factors motivating people to avoid their tax obligation

In addressing research, Kiabel and Nwokah (2009) noted that factors influencing
high rate of evasion can equally influence avoidance. 88% of the respondents gave a
positive response to the questionnaire acknowledging the fact that their disposable
income is seriously affected by taxation. This is also the case of a high tax rate as
well. High tax rate makes the tax payer to feel she/he is working in vain. Her/his
decision to work or not to or the labour hours she/he might be prepared to put in
might be reduced because of high tax rate. However, the poor performance of social
amenity has to a large extent discouraged tax payment. For instance those in the
informal sector spend heavily to provide for themselves power supply for their
businesses and homes, getting them to pay tax become a problem. The failure of
those in the informal sector to pay tax equally encourages avoidance and evasion.
This is because the few that are living up to their civic responsibility becomes
discouraged when they discover that defaulters go unpunished. Conclusively,
taxation is a very good sources of revenue generation but policies on taxation should
be made with due consideration for the welfare of the people in mind. Government
should make the people have a sense of belonging by providing social amenities with
revenue generated and defaulters in tax payment should be made to face the wrath of
the law. When that is done, the economic goal of taxation will be achieved (Laffer,
2009).

2.1.11 Theories of Tax Compliance

Various opinions exist about the best ways to improve tax compliance. Given the
chance, a lot of businesses will not pay taxes unless there is a motivation to do so.

19
Some believe that the best way is to increase incentives (Feld and Frey, 2007) others
believe the best way is to increase penalties. Tax compliance theories can be broadly
classified into two. They are; economics based theories and psychology based
theories.

2.1.11.1 Economic Based Theories

They are also known as deterrence theory and they place emphasis on incentives.
The first and well known theory of economics suggests that “taxpayers are amoral
utility maximizers- they are influenced by economic motives such as profit
maximization and probability of detection”. As such they analyze alternative
compliance paths for instance whether or not to evade tax, the likelihood of being
detected and the resulting repercussions and then select the alternative that
maximises their expected after tax returns after adjusting for risk. This process is
referred to as “playing the audit lottery” by Trivedi and Shehata (2005). Therefore
according to the theory, in order to improve compliance, audits and penalties for non-
compliance should be increased.

2.1.11.2 Psychology Theories

Psychology theories on the other hand posit that taxpayers are influenced to comply
with their tax obligations by psychological factors. They focus on the taxpayers’
morals and ethics. The theories suggest that a taxpayer may comply even when the
probability of detection is low. As opposed to the economic theories that emphasize
increased audits and penalties as solutions to compliance issues, psychology theories
lay emphasis on changing individual attitudes towards tax or revenue systems
(Chaudhry, 2010).

2.2 Literature review from earlier studies

Teera (2002) in his study examined the tax system and tax structure of Uganda to
investigate the factors effecting tax revenue in the country. He used the time series

20
data of the period 1970 to 2000 and estimated a model. His results showed that
agriculture ratio, population density and tax evasion affect all type of taxes. GDP per
capita showed the surprising negative sign. Tax evasion and openness (as measured
by import ratio) showed the significant negative impact. Aid variable showed
positive sign since aid in Uganda always supported imports especially raw material
so not surprisingly.

Baurer (2005) on the other hand by using the data of OECD and less developed
economies explained the determinants of tax revenue. He used the non-agricultural
share of GDP, openness and the rate of population growth all of which showed the
positive and statistically significant result. Simple correlation between tax effort and
the size of shadow economy showed the negative but statistically significant result.
Bilquees (2004) measured the buoyancy and elasticity of tax revenue system in
Pakistan over the period 1974 to 2003 by using the Divisia Index Approach and
analyzed the factors responsible for the resulting size of elasticity coefficients. Her
estimates of buoyancy suggested that tax changes did not lead to significant revenue
augmentation nor solved some challenges associated to them. But high coefficient of
sales tax with respect to GDP base reflected the inclusion of service sector and
utilities in sales tax net, which has serious implications for poor. However, their
studies could not identify the types of revenues needed to be collected by different
authorities.

Lutfunnahar (2007) identified the determinants of tax share and revenue performance
for Bangladesh along with 10 other developing countries for the 15 years through a
panel data analysis. The results obtained suggest international trade, broad money,
external debt and population growth to be significantly determinants of tax efforts.
The study concluded that Bangladesh and other countries have low tax effort (less
than unity index) and are not utilizing their full capacity of tax revenue and therefore
have the potential for financing budgetary imbalance through raising tax revenue.
Kemal (2007) in his study explored the long-run relationship between the
underground economy and formal economy. Results showed that underground
economy is causing the formal economy but not the vise versa. He suggested to the

21
increase in the number of legal documentation, strengthening the institutions, better
governance, decrease the number of regulations and restrict smuggling through tariff
rationalization to cut down tax evasion. However, their studies could not examine the
challenges facing revenue collection.

Fjeldstad (2009) pointed out that the degree of openness exerts the largest impact on
the tax ratio followed by the income variable, existence of agriculture share,
manufacturing sector and service sector as the coefficient is positively related and
statistically significant which could contribute positively to revenue collection.
Moreover, the study by Bahiigwa et al (2004) suggested that certain features of
international trade make it more amenable to taxation than domestic activities and
also in many developing countries, the international trade sector is typically the most
monetized sector of economy because the entrance and exit to the country takes place
in specified locations. But, Katz (1989) noted that trade taxes have historically been
the major source of government revenue during the early stages of economic
development because they are easier to collect while Gupta (2007) also found the
positive effect. With all these results, their studies could not identify the strategies for
the enhancement of revenue collection in various authorities.

2.3 Conceptual framework

The conceptual framework used in Figure 2.1 was modified from Rwegasira (2011)
whereby the challenges facing revenue collection were identified and examined for
the purpose of making TRA Morogoro stay and produce effective services for the
betterment of all stakeholders.

22
Figure 2.1: Conceptual framework model

Background Information Independent Variable Dependent Variable

Conceptual variables

- Weak administrative capacity to

assess taxes and levies and
enforce revenue laws and by-laws

-Taxpayer resistance and low

Personal Characteristics
 Sex
 Age
 Level of education
Situational Characteristics
 Occupation
morale on the part of citizenry
-Corruption including
embezzlement of revenue Revenue collection
-Political pressure on the revenue
collectors to relax in revenue
collection
-Broadening the tax base,
informal sector included in the tax
net

-Improving staff integrity

-Ensuring that all due government

revenue is collected, tax evasion
and avoidance are controlled

Source: Adapted and modified from Rwegasira (2011)

The background information of respondents such as personal and situational

characteristics added/complemented some value for the study while independent
variables influencing the revenue collection and vice versa.

23
 CHAPTER THREE
RESEARCH METHODOLOGY

3.0 Introduction

This chapter provided a blue print to be adopted in the study under the following
parts namely; research design; study area; population and sample size; sampling
techniques; data collection methods and data analysis techniques.

3.1 Research design

Case study research design was used in this study because of time and cost
considerations. This involves collecting empirical data, generally from only one or a
small number of cases. It usually provides rich detail about those cases of a
predominantly qualitative nature.

A case study generally aims to provide insight into a particular situation and often
stresses the experiences and interpretations of those involved. It uses direct
observation to give a complete snapshot of a case that is being studied. It is useful
when not much is known about a phenomenon (Ball, 1981). The researcher
interviewed the subject to obtain background records and administered
questionnaires to acquire quantifiable data on the subject.

3.2 Study area

The study was done at TRA Morogoro regional office because of the following
reasons: First, TRA Morogoro has not been performing well in revenue collections
(e.g. in 2010/11 the collection reached 93.8% while in 2011/12 the collection was
95.6%) and it is ranked 7th amongst the large regions. Second, Morogoro is among
the business hubs in Tanzania and it is located at the centre of various routes from
the commercial city of Dar es salaam but encountering revenue collection challenges.

24
3.3 Population and sample size

The population of the study comprised of 90 respondents from TRA Morogoro

branch and tax payers. The sample size of 32 respondents was purposively selected
comprising of (20) tax payers and TRA employees {Regional manager (1), head of
debt management & compliance department (1) and revenue collectors (10)}.

Cooper and Schindler (2008) argued that, for any valid and reliable study to be
carried, its sample shouldn’t be less than 30% of its population. As it stands, the
sample size is 35.5% of the population; hence fulfilling their argumentation. Table
3.1 shows the distribution of respondents.

Table 3.1: Sample distribution of respondents

S/N Category Population Sample size Method

employed
1 Regional manager 1 1 Purposive
sampling
2 Head of debt management and 1 1 Purposive
compliance department sampling
3 Debt management & compliance 18 10 Purposive and
department employees (revenue stratified
collectors) sampling
4 Tax payers 70 20 Purposive and
stratified
sampling
Total 90 32
Source: Researcher, 2013

3.4 Sampling techniques

The study utilized two sampling procedures namely; purposive and stratification
sampling.

3.4.1 Purposive sampling

This method was used to select the targeted respondents as indicated because it is a
non-random sampling procedure in which personal experience of the respondent was

25
considered to be key derived from the position one held or the roles s/he played in
relation to a particular business/activity.

The respondents selected purposively included; regional manager, head of debt

management & compliance department, revenue collectors and taxpayers.

3.4.2 Stratification sampling

This method was used focusing gender distribution in order to obtain views from
both women and men. The respondents stratified were drawn among 18 tax
collectors out of which 10 were selected and 70 tax payers out of which 20 were
selected. The strata were formed based on members' shared attributes or
characteristics then a random sample from each stratum was taken in a number
proportional to the stratum's size when compared to the population. These subsets of
the strata were then pooled to form a random sample (Castillo, 2009). The reason
according to Yin (2003) is that, stratification serves the distribution among
heterogeneous population which needs to be incorporated for the purpose of gaining
insights from it.

3.5 Data collection methods

Primary and secondary data collection methods were used to get information from
respondents and other sources.

3.5.1 Primary data collection methods

Primary data collection methods used by the researcher to collect data from the field
included; interviews and questionnaires.

26
 a) Interview

The researcher used interview to the regional manager and head of debt management
& compliance department in order to solicit information regarding the challenges
facing revenue collection at TRA Morogoro branch (Appendix 2). According to Yin
(2003) the interview tool is very important source of getting information and it is
helpful in handling case study research design related matters as the research design
indicates.

This method of data collection created and promoted the understanding of the
perceptions and values of revenue collected for service provision and enabled the
researcher to gather additional information that were not given by the respondents
when filling in the questionnaires. It involved the presentation of oral (verbal)
stimulus and replies in terms of oral (verbal) responses. The advantage of using
interviews was demonstrated by the fact that it is a quick method in gathering
information and the researcher could know whether the respondents understand the
questions or not.

b) Questionnaires

Questionnaires were used to obtain information regarding revenue collection from

the revenue collectors/debt management & compliance department employees and
taxpayers. The questionnaire consisted of properly constructed open and close ended
questions in order make it easier to obtain precise answers from the respondents.
Expert opinion was sought for in order to validate the content and the structure of the
questionnaire during the pilot study. Questionnaires complemented and
supplemented information obtained under interview and documentary review
(Appendix 1). The reason was to obtain consistency of responses to the questions
asked in repeated measurements (Carmines and Zeller, 1979).

27
3.5.2 Secondary data collection methods

The researcher used different documents in order to access accurate and reliable data.
Documents utilized comprised of guidelines, directives, policies and regulations
(regarding revenue collection), books and journals (as literatures) and TRA
Morogoro revenue collection performance reports.

3.6 Data analysis techniques

Data collected were analysed both qualitatively using content analysis whereby from
objectives 2 & 3 respondents were able to provide additional information to serve the
purpose of the study and analysed qualitatively in view of the stated objectives and
quantitatively using descriptive statistics analysis from SPSS where objectives 1, 2
& 3 items given were analysed. These were summarized, coded and analyzed by
Statistical Package for Social Science (SPSS).

Frequency distribution and percentages were used to describe major variables from
quantitative data. Qualitative data from interviews and observations were analyzed
using content analysis (by analysing texts regarding authorship, authenticity, or
meaning from respondents’ responses on "Who says what, to whom, why, to what
extent and with what effect?.").

28
 CHAPTER FOUR
PRESENTATION AND DISCUSSION OF THE RESEARCH FINDINGS

4.0 Introduction

This chapter presented and discussed research findings on the assessment of the
challenges facing revenue collection in Tanzania at TRA Morogoro. It presents the
demographic characteristics of the respondents; identifies the types of revenue
collected by TRA Morogoro; identifies the challenges facing revenue collection at
TRA Morogoro and determines the strategies for the enhancement of revenue
collection at TRA Morogoro.

4.1 Demographic characteristics of the respondents

The demographic characteristics of the respondents included; sex, age, level of

education and occupation. These were presented in Table 4.1 as follows.

Table 4.1: Demographic characteristics

Characteristics Frequency Percentage

Sex
Male 18 56.3
Female 14 43.7
Age (years)
18-28 6 18.8
29-39 7 21.8
40-50 12 37.6
51 and above 7 21.8
Level of education
Primary 5 15.7
Secondary and tertiary 7 21.8
Higher 20 62.5
Occupation
TRA employees 12 37.5
Business person/taxpayer 20 62.5
Source: Researcher, 2013

29
 a) Sex

The results in Table 4.1 showed that out of 32 respondents, 56.3% were male and
43.7% were female. Both male and female participation on the assessment of the
challenges facing revenue collection was important as men pointed out challenges
such as taxpayer resistance and low tax morale on the part of the citizenry which
result into low tax compliance; women provided challenges such as ensuring that all
due government revenue is collected and tax evasion and avoidance are controlled in
order to improve the services to the citizens as most of taxpayers have been
complaining on the inequity between what is paid and what is reciprocated in terms
of services by the government to the citizens.

b) Age

The results in Table 4.1 showed that, the age distribution of the respondents which
was between 18 and 28 years was 18.8%, 29 and 39 years was 21.8%, 40 and 50
years was 37.6%, and those with 51 years and above was 21.8%. However, those
who were between 18 to 39 years gave challenges such as the need to improve staff
integrity and tax evasion for the enhancement of government services to the public;
while those who were between 40 and 51 years and above of age gave challenges
facing revenue collection such as the availability of low level of literacy rates on tax
laws which necessitates tax evasion while rendering corruption practices among
staff.

c) Level of education

The results in Table 4.1 showed that 15.7% of the respondents had attained primary
education, 21.8% secondary and tertiary education and 62.5% higher education.
Education of respondents played a vital role in assessing the challenges facing
revenue collection at TRA Morogoro. While those who had primary, secondary and
tertiary education could provide challenges such as low level of literacy on tax laws
among taxpayers and corruption which includes embezzlement of revenue collected

30
by revenue collectors which demoralize taxpayers. Those with higher education
pointed out challenges such as unnecessary tax exemptions which do not benefit the
country rather than those who authorize exemptions and the inability to broaden the
tax base by including the informal sector in the tax net which would raise revenue to
serve the public as supported by Chijoriga (2012) and reduce dependence on donors
or developmental partners as among the challenges to be solved for the development
of the country.

d) Occupation

The results in Table 4.1 showed that; 37.5% were TRA employees from debt
management and compliance section and 62.5% were business persons/taxpayers.
However, the occupation of respondents was vital for the study as while TRA
employees could point out challenges facing revenue collection such as shortage of
staff, technology changes incorporated by TRA for the enhancement of revenue
collection but which do not favour the level of technical know how of taxpayers,
delivery of prompt and quality service needed by the public and high revenue targets
in comparison with the tax base present. The taxpayers pointed out challenges such
as technological problems such as unreliable network infrastructure to support the
use TRA machines as required and frequent changes of tax laws unknown to
taxpayers which retard the pace of tax payment and compliance.

4.2 Types of revenue collected by TRA Morogoro

The first objective of this study was to identify the types of revenue collected by
TRA Morogoro. The researcher identified three major categories of revenue which
include; a) direct taxes such as corporate tax, personal income tax, with holding tax,
rental taxes, management and professional fees; b) indirect taxes such as import duty,
excise duty (imports and local goods), VAT (imports and local supplies) and stamp
duty and c) non-tax revenues such as fees from passport and driving licenses, fines
and penalties (breach of law or non- fulfillment or failure) and surplus from public
enterprises (with holding on dividends) collected by the authority. To obtain

31
information on the types of revenue collected, the researcher asked the respondents
to tick them according to their understanding and use (which were analyzed in terms
of Yes or No responses). Table 4.2 provides them as follows

Table 4.2: Types of Revenue collected

Type Percentage %
Yes No
Direct tax
Corporate tax 100 00
Personal income tax 100 00
With holding tax 100 00
Rental taxes 100 00
Management and professional fees 100 00
Property Tax 00 100
Indirect tax
Import duty 100 00
Excise duty (imports and local goods) 100 00
VAT (imports and local supplies) 100 00
Stamp duty 100 00
Non-tax revenue
Fees from passport and driving licenses 100 00
Fines and penalties (breach of law or non-fulfillment or failure) 100 00
Surplus from public enterprises (dividends from profits taken as with 100 00
holding tax on dividends)
Source: Researcher, 2013

Specifically, the results in Table 4.2 showed that no respondents pointed out property
tax as among the types of revenue collected by TRA as it is collected directly by the
municipal council in reciprocal of service provision to its inhabitants. However, the
remaining direct taxes as reported by 100% of the respondents were collected by
TRA through the assistance of debt management and compliance section which are
responsible for the provision of guidance to taxpayers. In view of this, corporate tax
is paid by companies registered for their business undertaking which is normally
undergoing assessment and being obliged to pay the agreed amount without failure
as advocated by Chijoriga (2012). Likewise, personal income tax is paid by
organisations or firms after deducting pay as you earn (PAYE) from their employees
and presented to TRA for the enhancement of government services. With holding tax
and rental taxes are paid by taxpayers after carrying out business under the guidance
of tax collectors’ approval while management and professional fees are being paid by

32
professional firms in accordance to the requirements of the laws guiding
professionals.

On the other hand, the results showed that 100% of the respondents agreed that TRA
collects indirect taxes such as import duty, excise duty, value added tax (VAT) from
imports and local goods and stamp duty fees from the transactions done by taxpayers
in order to enhance the tax base and make the government provide services to its
citizens.

Furthermore, the results showed that 100% of the respondents agreed that TRA
collects non-tax revenues such as fees from passport and driving licenses, fees and
penalties emanating from the breach of law or non-fulfillment or failure to comply
with tax laws and surplus from public enterprises through their with holding tax on
dividends as supported by Mwinyimvua (1996) which boost revenue for the purpose
of making the government provide services to its people.

Generally, the results showed that, no respondents pointed out property tax as among
the types of revenue collected by TRA as it is collected directly by the municipal
council in reciprocal service provision to its inhabitants. However, the remaining
direct taxes as reported by 100% of the respondents were collected by TRA through
the assistance of debt management and compliance section which are responsible for
the provision of guidance to taxpayers. Such taxes included; corporate tax paid by
companies, personal income tax payable through employees’ pay as you earn, with
holding tax, rental taxes as well as management and professional fees paid by
professional firms in accordance to the requirements of the laws guiding
professionals. On the other hand, 100% of the respondents agreed that TRA collects
indirect taxes such as import duty, excise duty, value added tax (VAT) from imports
and local goods and stamp duty fees from the transactions done by taxpayers in order
to enhance the tax base and make the government provide services to its citizens.
Furthermore, 100% of the respondents agreed that TRA collects non-tax revenues
such as fees from passport and driving licenses, fees and penalties emanating from
the breach of law or non-fulfillment or failure to comply with tax laws and surplus

33
from public enterprises through their with holding tax on dividends which boost
revenue for the purpose of making the government provide services to its people.

4.3 Challenges facing revenue collection at TRA Morogoro

The second objective of this study was to identify the challenges facing revenue
collection at TRA Morogoro. The challenges included; availability of weak
administrative capacity to assess taxes and levies, then to enforce revenue laws and
by-laws; taxpayer resistance and low tax morale on part of citizenry, availability of
corruption including embezzlement of revenue; political pressure on the revenue
collectors to relax in revenue collection; broadening the tax base in order to include
informal sector in the tax net; ensuring that all due government revenue is collected
and tax evasion and avoidance are controlled; raising the level of revenue yield to be
commensurate with the average yield achieved in sub-Saharan Africa; addressing
stakeholders’ expectations by exercising various statutory powers fairly in
accordance with the law without political interference; expediting tax decision
making and rulings by putting in place well established procedures and criteria;
improving staff integrity; avoidance of tax evasion and tax exemptions as well as low
level of literacy rates. To obtain information on these challenges, the researcher
asked the respondents to tick and provide other challenges which they thought which
were analyzed in terms of agree and disagree (as there were no uncertain replies).
Table 4.3 provides these challenges as follows.

34
Table 4.3: Challenges facing revenue collection

Challenge Percentage
Agree Disagree
Availability of weak administrative capacity to assess taxes and 75 25
levies, then to enforce revenue laws and by-laws
Taxpayer resistance and low tax morale on part of citizenry, 80 20
availability of corruption including embezzlement of revenue
Political pressure on the revenue collectors to relax in revenue 78 22
collection
Broadening the tax base in order to include informal sector in the tax 85 15
net
Ensuring that all due government revenue is collected and tax 90 10
evasion and avoidance are controlled
Raising the level of revenue yield to be commensurate with the 80 20
average yield achieved in sub-Saharan Africa
Addressing stakeholders’ expectations by exercising various 85 15
statutory powers fairly in accordance with the law without political
interference
Expediting tax decision making and rulings by putting in place well 75 25
established procedures and criteria
Improving staff integrity 90 10
Avoidance of tax evasion 88 12
Tax exemptions 88 12
Low level of literacy rates to taxpayers 81 19
Source: Researcher, 2013

Specifically, the results in Table 4.3 showed that, 75% of the respondents reported
the availability of weak administrative capacity to assess taxes and levies, then to
enforce revenue laws and by-laws something that necessitates competent human
resources who could be enriched through tax management training as advocated by
Bird et al (2008) and expediting tax decision making and rulings by putting in place
well established procedures and criteria to enhance tax collection among taxpayers in
order to eradicate low tax compliance and achieve higher revenue targets in
comparison with the tax base. However, 78% of the respondents argued for the
availability of political pressure on the revenue collectors to relax in revenue
collection which result into tax evasion among taxpayers.

On the other hand, the results in Table 4.3 showed that, 80% of the respondents
reported the availability of taxpayer resistance and low tax morale on part of the
citizenry which may result into the reduction of revenue collection, availability of

35
corruption including embezzlement of revenue that is associated with low level of
tax knowledge by tax paying community and raising the level of revenue yield to be
commensurate with the average yield achieved in sub-Saharan Africa as among the
challenges. Likewise, 81% reported the challenge of availability of low level of
literacy rates to taxpayers regarding the utilization of technology in paying taxes and
sometimes encountering unreliable network infrastructure to support the use of
authorized TRA tax machines.

Furthermore, the results in Table 4.3 showed that 85% of the respondents reported
the challenge of broadening the tax base in order to include informal sector in the tax
net which has not yet been fully researched and decided on its inclusion and
addressing stakeholders’ expectations by exercising various statutory powers fairly in
accordance with the law without political interference while delivering prompt and
quality service to the public as advocated by Fjeldstad (2003). Moreover, 88%
reported the availability of tax exemptions which do not benefit the country rather
than those who authorize them resulting into tax evasion among taxpayers. Yet, 90%
of the respondents reported the challenge of improving staff integrity while
increasing taxpayers versus TRA administrative capacity in terms of IT requirements
and human capital enhancement in order to ensure that all due government revenue is
collected and tax evasion and avoidance are controlled.

Generally, the results showed that 75% of the respondents reported the availability of
weak administrative capacity to assess taxes and levies, then to enforce revenue laws
and by-laws something that necessitates competent human resources who could be
enriched through tax management training and expediting tax decision making and
rulings to enhance tax collection among taxpayers in order to eradicate low tax
compliance and achieve higher revenue targets in comparison with the tax base.
However, 78% of the respondents argued for the availability of political pressure on
the revenue collectors to relax in revenue collection which result into tax evasion
among taxpayers. On the other hand, 80% of the respondents reported the availability
of taxpayer resistance and low tax morale on part of the citizenry which may result
into the reduction of revenue collection, availability of corruption including

36
embezzlement of revenue that is associated with low level of tax knowledge by tax
paying community and raising the level of revenue yield to be commensurate with
the average yield achieved in sub-Saharan Africa as among the challenges. Likewise,
81% reported the challenge of availability of low level of literacy rates to taxpayers
regarding the utilization of technology in paying taxes and sometimes encountering
unreliable network infrastructure to support the use of authorized TRA tax machines.
Furthermore, 85% of the respondents pointed out the challenge of broadening the tax
base in order to include informal sector in the tax net which has not yet been fully
researched and decided on its inclusion and addressing stakeholders’ expectations by
exercising various statutory powers fairly in accordance with the law without
political interference while delivering prompt and quality service to the public.
Moreover, 88% reported the availability of tax exemptions which do not benefit the
country rather than those who authorize them resulting into tax evasion among
taxpayers. Yet, 90% of the respondents reported the challenge of improving staff
integrity while increasing taxpayers versus TRA administrative capacity in terms of
IT requirements in order to ensure that all due government revenue is collected and
tax evasion and avoidance are controlled.

4.4 Strategies for the enhancement of revenue collection at TRA Morogoro

The third and last objective of this study was to determine the strategies for the
enhancement of revenue collection at TRA Morogoro. The strategies included;
establishing more accessible and transparent payment facilities; improving fiscal
policy, legal and regulatory framework; broadening the tax base; enhancing
taxpayers’ education and sensitization; improving the citizens’ access to and right to
information on taxes collected and how revenues are spent; application of block
management system; use of presumptive approach of taxation; implementation of
weekly/monthly individual action plan and evaluation of results and implementation
of quality audit procedures for high revenue yield. To obtain information on these
strategies, the researcher asked the respondents to tick and provide many other
strategies which were analyzed in terms of agree and disagree (as there were no
uncertain replies). Table 4.4 provides the strategies as follows.

37
Table 4.4: Strategies for enhancing revenue collection

Strategy Percentage %
Agree Disagree
Establishing more accessible and transparent payment facilities 81 19
Improving fiscal policy, legal and regulatory framework 80 20
Broadening the tax base 85 15
Enhancing taxpayers’ education and sensitization 85 15
Improving the citizens’ access to and right to information on taxes 75 25
collected and how revenues are spent
Application of block management system 82 18
Use of presumptive approach of taxation 80 20
Implementation of weekly/monthly individual action plan and 85 15
evaluation of plans
Implementation of quality audit procedures for high revenue yield 78 22
Source: Researcher, 2013

Specifically the results in Table 4.4 showed that 75% of the respondents argued for
improving the citizens’ access to and right to information on taxes collected and how
revenues are spent as to avoid the citizens’ feeling that they receive little in return
from revenue paid and 78% argued for the implementation of quality audit
procedures for high revenue yield using educated and motivated staff while creating
closeness between taxpayers and tax collectors/officers as supported by Baurer
(2005).

On the other hand, the results in Table 4.4 showed that 80% of the respondents
argued for the use of presumptive approach of taxation through the use of indirect
means to ascertain tax liability based on turnover of the taxpayers while improving
staff tax awareness and fiscal policy, legal and regulatory framework in order to
enhance equal treatment to all investors (both domestic and foreign). However, 81%
of the respondents argued for establishing more accessible and transparent payment
facilities through technology improvement by utilizing E & D machines and online
filling (e-filling). Likewise, 82% of the respondents argued for the application of
block management system which is a door to door survey method to categorize
taxpayers in order to facilitate their monitoring process as to reduce no filers,
collection of arrears and proper assessment while enabling them pay tax in a cost
effective way as supported by Bahiigwa et al (2004).

38
Furthermore, the results in Table 4.4 showed that 85% of the respondents argued for
broadening the tax base in order to expand the total value of all income and property,
increase the number of taxpayers or types of taxes and formalization of the informal
sector as advocated by Lamb et al (2005). This goes hand in hand with enhancing
taxpayers’ education and sensitization to enable them understand the need to pay
taxes (i.e. voluntary compliance) by applying the principle of large numbers. Yet,
implementing weekly/monthly individual actions and evaluating plans for better
quality service provision while adhering to the requirements of the laws and
procedures which allow penalization of evaders to discourage tax evasion (e.g. non
filers, non issuance of receipts etc).

Generally, the results showed that 75% of the respondents argued for improving the
citizens’ access to and right to information on taxes collected and how revenues are
spent as to avoid the citizens’ feeling that they receive little in return from revenue
paid and 78% argued for the implementation of quality audit procedures for high
revenue yield using educated and motivated staff while creating closeness between
taxpayers and tax collectors/officers. On the other hand, 80% of the respondents
argued for the use of presumptive approach of taxation through the use of indirect
means to ascertain tax liability based on turnover of the taxpayers while improving
staff tax awareness and fiscal policy, legal and regulatory framework in order to
enhance equal treatment to all investors (both domestic and foreign). However, 81%
of the respondents argued for establishing more accessible and transparent payment
facilities through technology improvement by utilizing E & D machines and online
filling (e-filling). Likewise, 82% of the respondents argued for the application of
block management system to categorize taxpayers in order to facilitate their
monitoring process as to reduce no filers, collection of arrears and proper assessment
while enabling them pay tax in a cost effective way. Furthermore, 85% of the
respondents argued for broadening the tax base in order to expand the total value of
all income and property, increase the number of taxpayers or types of taxes and
formalization of the informal sector. This goes hand in hand with enhancing
taxpayers’ education and sensitization to enable them understand the need to pay
taxes (i.e. voluntary compliance) by applying the principle of large numbers. Yet,

39
implementing weekly/monthly individual actions and evaluating plans for better
quality service provision while adhering to the requirements of the laws and
procedures that allow penalization of evaders to discourage tax evasion.

40
 CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

The chapter provided the summary of findings, conclusion and recommendations.

Policy implications and the need for further research which are the outcome of the
study findings are also presented. It starts with the summary of findings; then
conclusion and recommendations; policy implications and finally the need for further
research are given.

5.1 Summary of Findings

The findings from the study indicated that, no respondents pointed out property tax
as among the types of revenue collected by TRA as it is collected directly by the
municipal council in reciprocal service provision to its inhabitants. However, the
remaining direct taxes as reported by 100% of the respondents were collected by
TRA through the assistance of debt management and compliance section which are
responsible for the provision of guidance to taxpayers. Such taxes included;
corporate tax paid by companies, personal income tax payable through employees’
pay as you earn, with holding tax, rental taxes as well as management and
professional fees paid by professional firms in accordance to the requirements of the
laws guiding professionals. On the other hand, 100% of the respondents agreed that
TRA collects indirect taxes such as import duty, excise duty, value added tax (VAT)
from imports and local goods and stamp duty fees from the transactions done by
taxpayers in order to enhance the tax base and make the government provide services
to its citizens. Furthermore, 100% of the respondents agreed that TRA collects non-
tax revenues such as fees from passport and driving licenses, fees and penalties
emanating from the breach of law or non-fulfillment or failure to comply with tax
laws and surplus from public enterprises through their with holding tax on dividends
which boost revenue for the purpose of making the government provide services to
its people.

41
Secondly, 75% of the respondents reported the availability of weak administrative
capacity to assess taxes and levies, then to enforce revenue laws and by-laws
something that necessitates competent human resources who could be enriched
through tax management training and expediting tax decision making and rulings to
enhance tax collection among taxpayers in order to eradicate low tax compliance and
achieve higher revenue targets in comparison with the tax base. However, 78% of the
respondents argued for the availability of political pressure on the revenue collectors
to relax in revenue collection which result into tax evasion among taxpayers. On the
other hand, 80% of the respondents reported the availability of taxpayer resistance
and low tax morale on part of the citizenry which may result into the reduction of
revenue collection, availability of corruption including embezzlement of revenue that
is associated with low level of tax knowledge by tax paying community and raising
the level of revenue yield to be commensurate with the average yield achieved in
sub-Saharan Africa as among the challenges.

Likewise, 81% reported the challenge of availability of low level of literacy rates to
taxpayers regarding the utilization of technology in paying taxes and sometimes
encountering unreliable network infrastructure to support the use of authorized TRA
tax machines. Furthermore, 85% of the respondents pointed out the challenge of
broadening the tax base in order to include informal sector in the tax net which has
not yet been fully researched and decided on its inclusion and addressing
stakeholders’ expectations by exercising various statutory powers fairly in
accordance with the law without political interference while delivering prompt and
quality service to the public. Moreover, 88% reported the availability of tax
exemptions which do not benefit the country rather than those who authorize them
resulting into tax evasion among taxpayers. Yet, 90% of the respondents reported the
challenge of improving staff integrity while increasing taxpayers versus TRA
administrative capacity in terms of IT requirements in order to ensure that all due
government revenue is collected and tax evasion and avoidance are controlled.

Finally, 75% of the respondents argued for improving the citizens’ access to and
right to information on taxes collected and how revenues are spent as to avoid the

42
citizens’ feeling that they receive little in return from revenue paid and 78% argued
for the implementation of quality audit procedures for high revenue yield using
educated and motivated staff while creating closeness between taxpayers and tax
collectors/officers. On the other hand, 80% of the respondents argued for the use of
presumptive approach of taxation through the use of indirect means to ascertain tax
liability based on turnover of the taxpayers while improving staff tax awareness and
fiscal policy, legal and regulatory framework in order to enhance equal treatment to
all investors (both domestic and foreign). However, 81% of the respondents argued
for establishing more accessible and transparent payment facilities through
technology improvement by utilizing E & D machines and online filling (e-filling).
Likewise, 82% of the respondents argued for the application of block management
system to categorize taxpayers in order to facilitate their monitoring process as to
reduce no filers, collection of arrears and proper assessment while enabling them pay
tax in a cost effective way.

Furthermore, 85% of the respondents argued for broadening the tax base in order to
expand the total value of all income and property, increase the number of taxpayers
or types of taxes and formalization of the informal sector. This goes hand in hand
with enhancing taxpayers’ education and sensitization to enable them understand the
need to pay taxes (i.e. voluntary compliance) by applying the principle of large
numbers. Yet, implementing weekly/monthly individual actions and evaluating plans
for better quality service provision while adhering to the requirements of the laws
and procedures that allow penalization of evaders to discourage tax evasion.

5.2 Conclusion

The respondents identified the direct, indirect and non-tax revenues which were
among the revenue collected by TRA Morogoro while encountering challenges such
as the availability of inadequate staff and tax evasion. However, the low level of
literacy rates to taxpayers regarding the utilization of technology in paying taxes (e.g.
e-filling) and unreliable network infrastructure to support revenue collection process
were envisaged as hindrances to the attainment of TRA goals. Moreover, improving

43
the citizens’ access to and right to information on taxes collected and how revenues
are spent was vital and needed to be clearly given to the public in order to avoid the
citizens’ feeling that they receive little in return from revenue paid.

5.3 Recommendations and policy implication

From the above findings, the researcher proposes the following recommendations
and policy implication.

5.3.1 Recommendations

a) Staff shortage and tax evasion were reported by respondents to be among the
challenges encountering TRA Morogoro. Therefore, in order to harness revenue
fully, it is recommended to solve the underlining challenges for the facilitation of
better and quality services to the public.
b) Taxpayer literacy rate was reported by respondents to be low. Therefore, the
enhancement of taxpayer education on tax laws and procedures, building public
support and effective publicity through various ways such as media is important for
the facilitation of voluntary tax compliance.
c) Taxpayers complained on the information gap regarding the revenue collected to
be reciprocated to the public which necessitates citizens’ feeling that they receive
little in return from revenue paid. It is recommended to establish avenues to discuss
and put forward what is done by the government out of citizens’ taxes in order to
avoid unnecessary complaints.

5.3.2 Policy Implication

The researcher argues for revenue collection capacity enhancement through staff
enhancement and enrichment while facilitating taxpayers with education and
establishing more accessible and transparent payment facilities in order to minimize
revenue leakages.

44
5.4 Need for Further Research

The study assessed the challenges facing revenue collection in Tanzania with
evidence from TRA Morogoro. Further studies need to be done on the following
issues;
i) What is the perception of taxpayers regarding the misuse of revenue collected
by the authority in relation to revenue evasion?
ii) To what extent has TRA Morogoro been able to address revenue evasion?

45
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Ball, S. (1981). Beach side Comprehensive: A Case study of secondary schooling.
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Carmines, B and Zeller, A (1979) Primary and Secondary data collection Methods.
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48
APPENDICES
Appendix 1: Questionnaires

QUESTIONNAIRES FOR DEBT MANAGEMENT & COMPLIANCE

DEPARTMENT EMPLOYEES AND TAXPAYERS

Topic: Assessment of the challenges facing revenue collection in Tanzania:

Evidence from TRA Morogoro

PART A: Types of revenue collected by TRA Morogoro branch

1. Are these types of revenues collected by TRA Morogoro branch? (Tick where
appropriate).
No Type Yes No

1
Direct taxes such as;
Corporate tax

Personal income tax

With holding tax

Rents

Management and professional fees

Property tax

2
Indirect tax
Import duty

Excise duty (imports and local goods)

VAT (imports and local supplies)

Stamp duty

3
Non-tax revenues
Fees from passport and driving licenses

Fines and penalties (breach of law or non-fulfillment or failure)

Surplus from pubic enterprises (dividends from profits)

49
PART B: Challenges facing revenue collection by TRA Morogoro branch

2. Please indicate your agreement or disagreement regarding the challenges facing

revenue collection by TRA Morogoro branch as follows; 1) SA=Strongly Agree 2)
A=Agree 3) U=Uncertain 4) D=Disagree 5) SD=Strongly Disagree.
Choice
Challenge

Uncertain

Disagree
Strongly

Strongly
disagree
Agree
agree
Weak administrative capacity to assess taxes and
levies and then to enforce revenue laws and by-laws
Taxpayer resistance and low tax morale on the part
of the citizenry
Corruption, including embezzlement of revenue
Political pressure on the revenue collectors to relax in
revenue collection
Broadening the tax base, informal sector included in
the tax net
Ensuring that all due government revenue is
collected and tax evasion and avoidance are
controlled
Raising the level of revenue yield to be
commensurate with the average yield achieved in
Sub-Saharan Africa
Addressing stakeholders’ (community) expectations
by exercising various statutory powers fairly in
accordance with the law without political
interference
Expediting tax decision making and rulings by
putting in place well established procedures and
criteria
Improving staff integrity
Tax evasion
Tax exemptions
Low level of literacy rates (awareness of the public)

50
PART C: Strategies for the enhancement of revenue collection by TRA
Morogoro branch

3. Please indicate your agreement or disagreement regarding the strategies for the
enhancement of revenue collection by TRA Morogoro as follows; 1) SA=Strongly
Agree 2) A=Agree 3) U=Uncertain 4) D=Disagree 5) SD=Strongly Disagree.
Choice
Strategy

Uncertain

Disagree
Strongly

Strongly
disagree
Agree
agree
Establishing more accessible and transparent
payment facilities
Improvement on the fiscal policy, legal and
regulatory framework (e.g. equal treatment of all
investors)
Broadening the tax base (e.g. expanding the total
value of all incomes and property, increase the
number of tax payers or type of taxes and
formalization of the informal sector)
Improved fiscal prudence and financial discipline and
economic management (cost cutting and resource
rationalization measures e.g. focused expenditure,
balance between recurrent and development
expenditures)
Improvement in tax administration (e.g. building
sector specific administration capacity)
Enhancement of taxpayers’ education and
sensitization (e.g. understand the need to pay taxes-
the principle of large numbers)
Citizens’ access to and right to information on taxes
collected and how revenue are spent
Application of block management system- door to
door survey (i.e. monitoring activities as to make
them pay tax in a cost effective way)
Use of presumptive approach of taxation (i.e. use of
indirect means to ascertain tax liability based on
turnover)

PART D. Identification (Please tick where appropriate)

4. Gender of the Respondent.

a) Male ( ) b) Female ( )

5. In which Age category do you belong?

a) 18-28 ( ) b) 29-39 ( ) c) 40-50 ( ) d) 51 and above ( )

6. What is your highest level of education?

51
a) Primary education ( ) b) Secondary and tertiary education ( )

c) Higher education ( )

7. What is your occupation? A) TRA employee ( ) B) Business person/taxpayer ( )

52
Appendix 2: Interview guide questions for the regional manger and head of
debt management & compliance department

i) What are the types of revenue collected by TRA Morogoro branch?

ii) What are the challenges facing revenue collection at TRA Morogoro branch?

iii) What are the strategies for the enhancement of revenue collection at TRA
Morogoro branch?

53