Major Taxation Challenges facing Small and Medium Scale Business Enterprises in Tanzania

Abstract

The major objective of this study was to determine the major taxation challenges facing small and medium scale business enterprises (SMEs) in Tanzania. Specifically, this study was conducted in three regions of Tanzania which were Kilimanjaro, Arusha and Manyara. A total of 187 entrepreneurs participated in this study. The study revealed that the major challenges facing entrepreneurs for small and medium scale business enterprises were high and multiple taxes, changes in taxes and unreasonable taxes imposed by the revenue authorities. Other challenges were difficulty and bureaucracy in paying taxes, complex tax computations and unfriendly tax administrators. Some of the recommendations to curb those challenges were the application of principles of a good tax system. Basically, the government should create fairness and equality in tax determination. Moreover, the government should stream line the taxes and all services related to the imposition of those taxes. Ultimately, there should be a reasonable tax basis for small and medium scale business enterprises in Tanzania.