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Income tax law simplification and tax compliance: a case of medium taxpayers in Zanzibar

 

Shuweikha S Khalfan1, Ernest G. Kitindi2 and Henry Chalu3

 

ABSTRACT

Tax law simplification was among tax reform strategies formulated to address tax law complexity

and improve tax compliance. Although it is about two decades of implementation of the new tax laws, little is known on the effect of such simplification on tax compliance. This paper examined the influence of the Income Tax Law (ITL) simplification on tax compliance in Zanzibar. A survey was conducted among 367 medium taxpayers registered with TRA– Zanzibar. Descriptive and Structural Equation Model were used for data analysis. The findings reveal that tax compliance level of medium taxpayers is high and the ITL simplification positively and significantly influenced tax compliance among medium taxpayers in Zanzibar. The study found medium taxpayers considered the ITL as readable, though the challenge was on its understandability and applicability. This study urges tax authorities to improve the ITL education and establish a special unit to deal with medium taxpayers only.

Key words: Income tax law simplification, Tax compliance, Medium taxpayers.

 

INTRODUCTION

In  the  current  global  economic  environment,  the  contribution  of  income  tax  compliance  to

economic development cannot be undervalued. Income tax contributes a large part of domestic revenue collections (IMF, 2014; OECD, 2008). It guarantees governments with reliable internal sources of fund for public expenditure [like security, road construction, education, poverty reduction and create framework for economic growth] (IMF, 2014; IMF, OECD, UN, & World Bank, 2011; OECD, 2008). Tax compliance means the willingness of taxpayers to follow the requirements of tax laws (James & Alley, 2002; Kirchler, 2007).

 

Although, high tax compliance becomes the desire of all governments, spurring tax compliance is a challenging and complex task of all tax administrations (Brondolo, 2009; Alm & Martinez- Vazquez, 2006). The challenges arise from the fact that, most tax administrations have scarce resources with a high demand for revenue collections (IMF, 2013; Ongwamuhana, 2011). Yet, many people do not like to pay tax (Hofmann, Hoelzl & Kirchler, 2008). The critical question raised here is, why don’t many people like to pay taxes? Literature shows that tax compliance is a complex interdisciplinary phenomenon, which is determined by various factors (Kirchler, 2007; Nichita,

2012). The complexity nature of tax compliance leads to a lack of agreed definitions, measurement

and consensus as to why people do or do not pay their taxes (Kirchler, 2007). Hence, the literature recommends that tax authorities should understand factors which are highly influencing taxpayers’ decisions to comply with the tax laws and employ effective tax compliance strategies to ensure high tax compliance (Ayres & Braithwaite, 1992; Devos, 2014; Morris & Lonsdale, 2004; Nichita,

2012).

 

Tax law complexity has been mentioned as an important determinant of tax compliance (Kirchler,

2007; Fjeldstad & Moore, 2008; Loo, McKerchar & Hansford, 2010). This is because the t ax law provides a tax base, responsibilities of taxpayers, procedures as well as tax rate (Forest & Sheffrin,

 

 

1PhD student, University of Dar es Salaam, Business School, Tanzania (email: shweikha@yahoo.com)

2Associate Professor - University of Dar es Salaam Business School

3Senior Lecturer - University of Dar es Salaam Business School.

Business Management Review: Volume 23, Number 1, pages 1 -18, ISSN 0856-2253 (eISSN 2546-213X) ©January-June, 2020 UDBS. All rights

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2002). For taxpayers to be compliant, they are supposed to have a clear knowledge of the tax law. That is, they must be able to read, understand and apply the tax law effectively (Kasipillai, 2000; Palil, 2005; Saad, 2010). However, many tax laws are considered to be complex (Carnes & Cuccia,

1996; Kirchler, 2007; Looet al., 2010). The complexity nature of tax laws comes from the user’s difficulty in reading, understanding and applying tax laws (Mulder, Verboon & De Cremer, 2009; Saad, 2010). The complex tax law affects tax compliance (Fjeldstad & Moore, 2008; Richardson,

2006). Saad (2010) noted that high level of complexity in tax law leads to reduction o f technical

accuracy to both tax administrators and taxpayers. Fjeldstad & Moore (2008) noted that many large corporations in Tanzania litigate against the tax system for lack of simplicity and constructive dialogue with the tax administration. The tax law complexities cause taxpayers to deploy services of tax professionals, which increase the cost of compliance. The increased compliance cost may cause some taxpayers, especially small and medium taxpayers, to opt not to comply (Loo et al.,

2010; Mckerchar,  2003;  Mahangila,  2017).  This  assertion  speaks  to  the  Theory of Planned

Behaviour that argues that an individual’s decision to conduct a particular behaviour is determined

by his/her perception of the ease or difficulty of performing such behaviour (Ajzen, 1991).

 

Tax law simplification was among tax reform strategies undertaken in many countries (including

Tanzania) to promote tax compliance (Gill, 2003; IMF, 2013; Kitillya, 2011; Ongwamuhana,

2011). This process was intended to place simple tax law from user’s perspectives; to enable users to be able to read, understand, and correctly apply them (Saad, 2014). The simple tax law was expected to reduce the need for hiring tax experts. It was also aimed at reducing the compliance cost to improve tax compliance and revenue collections (Loo et al., 2010; Palil, 2005; Richardson,

2006). In Zanzibar, tax laws simplification has led to the improvement of existing tax laws and the

introduction of new tax laws. The new tax laws include the Income Tax Act No 11 of 2004, The

Value Added Tax, 1997 as well as the East African Community Customs Management Act, 2004.

 

Despite decades of implementations of simplified tax laws in many countries, still the question of how it influences tax compliance is not full addressed in academic circles. The empirical literature proffers few studies that have examined the effect of tax law simplification on compliance (Akhand,

2012; Ongwamuhana, 2011). However, the findings of these studies are not consistent and have

some limitations which encourage further investigation. For example, Akhand (2012) found out that simplified tax laws have a significant positive influence on overall compliance among large taxpayers in Bangladesh. Ongwamuhana (2011) opined that, despite the reforms undertaken in Tanzania, tax laws do not encourage taxpayers to comply. However, this study did not assess the impact of ITL simplification on tax compliance in Tanzania.

 

Literature also shows few studies that examined the impact of tax laws simplification on simplicity of tax laws (Forest & Sheffrin, 2000; Kirchler, Niemirowski, & Wearing; 2006; Tan &Tower, 1992; Pau, Sawyer& Maples, 2007; Saw & Sawyer, 2010). These studies assess the simplicity of tax law in terms of the readability factor only and ignore the understandability and applicability of the tax laws, which are also important variables in assessing the simplicity of tax law. However, these studies portray conflicting results some studies found tax law simplification improved the readability of tax law (Kirchler et al.,2006; Pau et al., 2007), while other studies found that tax laws simplification failed to improve the readability of tax laws (Tan &Tower, 1992). Moreover, many studies have been conducted in developed countries and ignore many developing countries that also simplified their tax laws.   The findings of existing studies cannot  be applied effectively by developing countries, because of cultural, socio-economic as well as tax systems differences. To the best of this researcher’s knowledge, no study has examined the influence of ITL simplification on tax compliance of medium taxpayers in Zanzibar.

 

The medium taxpayes compliance is very crucial, because of their potential revenue contributions

(Arachi & Santoro,  2007; Bennett,  2008).  However,  the accessed  literature shows no  study


 

 

investigated this phenomenon. Many studies group medium together wit h small taxpayers and report them as small and medium taxpayers (Arachi & Santoro, 2007, Mahangila, 2014; Ondimu,

2015;  OECD,  2012).  These  studies  claim  that,  small  and  medium  taxpayers  made  huge

contributions to the economy, but they are associated with tax non-compliance (Akhand, 2012; Arachi & Santoro, 2007; Bennett, 2008; Cynthia, 2009). For example, Kimungu & Kileva (2007) noted that, the Small and Medium Enterprises (SMEs) contribute between35 and 50 per cent of Gross Domestic Product in Tanzania. But the Tanzania Revenue Authority (TRA) collects below

30% of tax revenue from SMEs who form 90% of all taxpayers in the country. However, t he findings from SME’s taxpayes studies cannot be effectively used for promotion of medium taxpayer’s compliance. This is due to the fact that medium taxpayers are different from small taxpayers in many respects like business size, type of business, profit margin, and most likely in their level of tax compliance (Akhand, 2012; Kirchler, 2007; Morris & Lonsdale, 2004). Therefore, separate medium taxpayer’s studies are needed to develop effective strategy that ensures long-term compliance of this prospective group of taxpayers.

 

Zanzibar is a part of the United Republic of Tanzania commonly known as Tanzania (TRA, 2004). The researcher was interested on Zanzibar because of business densities and nature of economic activities. For a long time, Zanzibar has been considered as a centre for business across eastern and central Africa (ZNCCIA, 2013). The Zanzibar Small and Medium Enterprises (SME) Policy consider medium taxpayers as an engine for economic development (MTI, 2006). Zanzibar also employs simplified ITL to promote tax compliance, but the speculation in tax revenue collection performance necessitated investigation in this area (TRA, 2018). Therefore, the current study examined the influence of ITL simplification of tax compliance among medium taxpayers in Zanzibar.

 

LITERATURE REVIEW Theoretical Literature Review Theory of Planned Behaviour

The current study based on the Theory of Planned Behaviour (Ajzen, 1991). This theory is the most widely used model to explain and predict behaviour (Armitage & Conner, 2001). The application

of the Theory of Planned Behaviour (TPB) in taxation is still growing. Literature shows very few

studies that employed this theory to predict tax compliance behaviour. Scholars who have applied this theory in their studies include, but not limited to, Achmat (2013); Bobek, Richard, & Hatfield (2003); Godin & Kok (1996); MirzaBin (2016); Trivedi, Shehata & Mestelman (2005); Saad (2014) and Smart (2012). According to TPB a person’s behaviour is determined by the intention to perform the behaviour and perceived behavioural control that refers to the perceived ease or difficulty involved  in performing  the  behaviour  of interest  (Ajzen,  1991;  Ajzen,  2010). The  intention indicates the individual’s readiness to perform certain behaviour. The behavioural intention is a function of an individual attitude towards the behaviour, which is the evaluatio n of performing the behaviour as favourable or not.

 

The current study employed TPB to determine the tax compliance among medium taxpayers in Zanzibar. The income taxation in Zanzibar is based on a self-assessment system, where taxpayers are supposed to  assess tax,  file returns and  pay their  income tax due without tax officials’ intervention. In this situation, the income tax compliance behaviour is highly determined by taxpayer’s intention to comply. The taxpayer’s intention to comply is also determined by both taxpayer’s attitudes on tax compliance and the perceptions of his/her important people on tax compliance. Therefore, TPB was found to be appropriate in predicting the income tax compliance behaviour of medium taxpayers in Zanzibar.  TPB was also used to determine the influence of the ITL simplification of tax compliance. This theory contends that behaviour is determined by the individual perceptions of simplicity or difficulty in performance of such behaviour (Ajzen, 1991). This study argues that, high tax compliance can be achieved when taxpayers perceive tax law as


 

 

simple, reduces compliance cost and improves tax compliance. Therefore, it was expected that the

ITL simplification would promote medium taxpayer’s compliance.

 

Empirical Literature Review

Tax Compliance and Non-Compliance

Literature shows that tax compliance is a complex phenomenon which is determined by many

factors (Kirchler, 2007). The complex nature of tax compliance leads to no standard agreed definition of tax compliance. Various tax compliance definitions have been developed. Andreoni, Erard & Feinstein. (1998) point out that tax compliance is a fluid concept that has different meanings from different perspectives. For example, in public finance theories, tax compliance relates to equity and efficiency issues. In organizational theories, it relates to the principal-agent problem, where corporations and their advisors continually provide asymmetrical information about their income and tax liabilities.

 

The current study adopted James & Alley’s (2002) definition that tax compliance means the willingness of individuals and other entities to act within the spirit as well as the letter of tax law and administration without application of enforcement activity. Tax non-compliance means failure to follow the requirements of tax law that results in the delays or failure to pay tax. There are two kinds of tax non-compliance known as tax evasion and tax avoidance. Tax evasion is a deliberate illegal intention to reduce tax liabilities and tax avoidance is the action taken to achieve the legal reductions of tax liabilities (Alm, 1999; Kirchler, 2007; Slemrod, 2007).

 

The Income Tax Law (ITL) Simplification in Tanzania

In Tanzania, income taxation is governed by the Income Tax Act, 2004. The ITL is the regulatory instrument that governs the income taxation (Forest & Sheffrin, 2002). Income tax is levied on income from employment, income from business and income from investment (URT, 2004). The Income Tax Act, 2004 is a new ITL that came into effect in July 2004 and repealed the previous Income Tax Act, 1973.The Income Tax Act, 1973 was considered to be complex, with many loopholes for tax avoidance. It also failed to cope with modern business practices (Luoga, 2003; Kitillya, 2011; Ongwamuhana, 2011; Osoro, 1995). The complex nature of the Income Tax Act,

1973 has been also associated with the widespread tax non-compliance, corruption and low revenue

collections that caused the fiscal crisis in the 1990s (Fjeldstad, 2003; Osoro,1995).

 

The ITL simplification was among tax reform strategies undertaken to improve tax compliance and revenue collection so as to restore economic crisis (Hasseldine & Bebbington, 1991; IMF, 2014; Kitillya, 2011; Ongwamuhana, 2011). This process led to the introduction of the new Income Tax Act, 2004. The simplified ITL restructured the income tax system in line with modern requirements (Luoga, 2003; Kitillya, 2011; Ongwamuhana, 2011). The Income Tax Act, 2004 was expected to be simple where users can read, understand and apply properly so as to minimize compliance cost, promote tax compliance and revenue collections (IMF, 2014; Kitillya, 2011; Ongwamuhana, 2011; Palil, 2005; Saad, 2010).

 

Tax Law Simplification and Tax Compliance

Tax laws are the legal rules and procedures governing how federal, state, and local governments

calculate the tax you owe (Forest & Sheffrin, 2002). Tax law is a base for tax compliance. Tax laws provide the tax base, responsibilities of taxpayers, procedures as well as tax rates (Forest & Sheffrin, 2002). Taxpayers become compliant when they follow the requirements of tax laws (Kirchler, 2007). Franzoni (2000) noted that, for a taxpayer to be considered as entirely compliant he/she must fulfil four conditions of tax laws which are: (1) true reporting of the tax base, (2) correct computation of the liability, (3) timely filing of the return, and (4) timely payment of the amounts due. Any deviation from these conditions leads to tax non-compliance. Thus, for taxpayers to be compliant they need not only have the willingness to comply but also have a clear knowledge of


 

 

all tax laws, that is, he/she must  be able to read, understand, and apply tax laws effectively (Kasipillai, 2000; Palil, 2005; Saad, 2010). Knowledge on tax laws is much needed  in self- assessment system where taxpayers are supposed to correctly calculate their own tax dues. The knowledge on tax laws becomes very important in determining tax compliance (Loo, 2006).

 

The government enacts tax laws with the assumption that all taxpayers have clear knowledge of tax laws and they can comply. However, many people complain on the complexity in tax laws (Carnes

& Cuccia, 1996; Loo et al., 2010). The complex nature of tax laws comes from the user’s difficulty

in reading, understanding, and applying tax laws (Binh, 2000; Mulder et al., 2009; Saad, 2010). Complex tax laws also affect tax compliance (Richardson, 2006). However, there is a contradiction in terms of preference on tax law complexity between users who prefer simple tax laws [many of them being  taxpayers]  and  those who  prefer  ambiguous tax  laws [many of them being  tax authorities, lawyers and accountants] (Forest & Sheffrin, 2002). More complex tax laws impede the fairness of the tax system because not all taxpayers are able to take advantage of complex tax laws (Fjeldstad, & Moore, 2008). Moreover, Saad (2010) noted that, high level of complexity in tax law leads to reduction of technical accuracy to both tax administrators and taxpayers. This causes some taxpayers to deploy services of tax professional which increase the cost of compliance. The increased cost of compliance may cause some taxpayers to opt not to comply (Loo et al., 2010; McKerchar, 2003; Mahangila, 2017). Tax non-compliance adversely affects tax administration efficiency and economic development (Brand, 1996; Tanzi, 2000; OECD, 2008).

 

In addressing the adverse effect of tax laws complexity on economic development, many countries have simplified their tax laws (IMF, 2013). More often simplicity has more considerable advantage over complexity (Hasseldine & Bebbington, 1991). Tax laws simplification was among tax reform strategies undertaken to improve tax compliance and revenue collection to restore economic crisis (Hasseldine & Bebbington, 1991; IMF, 2014; Kitillya, 2011; Ongwamuhana, 2011). Binh (2000) argues that  simplification of tax  laws  is the greatest  and  critical role of tax administration. Simplicity  is  a complex,  multi-facetted  concept  that  needs a clear  definition on  its  specific applications.  Otherwise,  one  might  intend  to  simplify  but  result  into  more  co mplexities.  A commonly accepted definition of legal simplicity of taxation is the ease by which a body of tax law can be read, correctly understood and applied to practical situations (Binh, 2000). Therefore, a simple tax law is one that users can read, understand, and apply (Binh, 2000; Mulder et al., 2009; Richardson, 2006; Saad, 2014). Literature shows various forms of tax law simplification like the reduction of number of tax rates, harmonization of definitions, compliance procedure and the introduction of new tax laws (Cox & Eger, 2006). Tax law simplification intends to place simple tax laws that users can read, understand, and correctly apply, particularly in determining accurate tax liabilities. It also aims at minimizing compliance cost by reducing the need for employing tax expert and eventually improving the level of tax compliance and revenue collections (Cox & Eger,

2006; Loo et al., 2010; Palil, 2005; Richardson, 2006; Saad, 2010).

 

In spite of the various tax laws simplification undertaken around the world little is known on the impact of such simplification on tax compliance. Literature shows a few studies examined the impact of tax law simplification on simplicity of tax laws (Forest & Sheffrin, 2000; Kirchler et al.,

2006; Tan & Tower, 1992; Pau et al., 2007; Saw & Sawyer, 2010). These studies assessed the simplicity of tax law in terms of the readability factor only and ignore the understandability and applicability of the tax laws, which are also important variables in assessing the simplicity of tax law. However, these studies showed mixed and contradicting results that calls further investigation in this area. For example, Tan & Tower (1992) employed Flesch Reading Ease Index to measure the readability level of New Zealand tax legislation. The Flesch Reading Ease Index measures the difficulty ranging from zero (most difficult) to 100 (least difficult). They found that the efforts made by the tax authority at that time to simplify the tax law failed. However, Pau et al. (2007)


 

 

showed conflicting results on the readability of the newly written Income Tax Act of 2004. They used Flesch Reading Ease Index and found a significant improvement in respect of tax simplicity through readability measure. This finding related to the results of Sawyer (2007) who agreed that there have been some improvements in tax simplification. Saw & Sawyer (2010) examined the readability of a sample of the selected sections of the Income Tax Act 2007 in New Zealand using similar measures as in Pau et al. (2007) and found significant success in improving readability of such tax law. Laffer, Winegarden & Childs. (2011) also assessed the effect of the simplification of the tax laws on compliance costs in the USA. The study used the annual federal funds rate on 10 years Treasury bond and found that, when taxpayers comprehend the tax laws, the tax compliance cost is greatly reduced. However, these studies did not assess the influence of tax law simplification on tax compliance.

 

The accessed literature shows very few studies assessed the influence of tax law simplification on tax compliance (Akhand, 2012; Ongwamuhana, 2011). However, the findings of these studies are not consistent and have some limitations which encourage further investigation. For example, Akhand (2012) assessed the contribution of simplified tax laws on tax compliance among large corporate taxpayers registered with the Large Taxpayers Unit (LTU) of Bangladesh. Following an analysis of elite  interviews and  survey data using  logistic regression,  Chi-square  automatic interaction detector and multilevel logistic regression, the findings suggest that, simplified tax laws do not affect neither, filing compliance, reporting compliance nor payment compliance of large corporate taxpayers. However, simplified tax law was found to play a significant positive role in improving overall tax compliance of large corporate taxpayers in Bangladesh.

 

Most of these studies have been conducted in developed countries and ignored many developing countries which also simplify their tax laws. So far, it is only Ongwamuhana (2011) who assessed the tax compliance in Tanzania by analysing the law and policy affecting voluntary taxpayer compliance. He employed documentary review and gives a one-person opinion that, despite the reforms undertaken in Tanzania, tax laws do not encourage taxpayers to comply. However, this study did not assess the impact of ITL simplification on tax compliance in Tanzania. In this regard, this  paper  examines  the  influence  of ITL  simplification  on  tax  compliance  among  medium taxpayers in Zanzibar. It is therefore expected that the ITL simplification introduced the new Income Tax Act, 2004 which is simple, can easily be read, understood and applied effectively and that improves tax compliance. This expectation is reflected in the following hypothesis, which proposes to test the relationship between the ITL simplification and tax compliance.

 

H1:     The ITL simplification positively influences tax compliance among medium taxpayers in

Zanzibar.

 

METHODOLOGY

This study employed Post- positivism deductive approach to understand the influence of ITL

simplification on tax compliance among medium taxpayers in Zanzibar. A survey was conducted on 367 medium taxpayers who are registered for Income tax purposes with TRA-Zanzibar. Data were collected using structured questionnaires. The study involved two main variables which are the ITL simplification as an independent variable and tax compliance as a dependent variable. The ITL simplification was measured from the taxpayer’s perception of the simplicity in the Income Tax Act, 2004. This variable was measured through the readability, understandability and applicability of the Income Tax Act, 2004. These measures were also used by Laffer et al. (2011); Binh (2000); Lawless (2009); Long & Swingen (1987) as well as Saad (2010). Based on the definition of tax compliance by James & Alley (2002), tax compliance is the willingness of taxpayers to follow the requirements of tax laws. Tax compliance in this study was measured as voluntary tax compliance by using voluntary tax compliance indicators developed by Kirchler & Wahl (2010) and Braithwaite, Murphy & Reinhart (2007). These measures were also used by


 

 

Alabede, Ariffin & Idris (2011); Kirchler, Hofmann & Gangl (2012) as well as Siahaan (2012). Descriptive analysis and Structural Equation Modelling (SEM) were used to analyse data and test the hypothesis of this study.   Out of 367 questionnaires distributed, 308 questionnaires were successfully completed and returned. This forms an83.9% response rate, which is enough to continue with the study (Finchman, 2008; Hair, Black, Babin & Anderson, 2014; Sekaran & Bougie, 2010). These findings also support the idea of Sapiei, Kassipillai, & Uchenna (2014) that research in the area of taxation is a sensitive issue that makes taxpayers reluctant to respond to the questionnaires.

 

DATA ANALYSIS AND INTERPRETATION OF FINDINGS

Descriptive Analysis

Descriptive results coveringrespondents’ profiles, respondents’ perception on tax compliance,

Income tax law simplification and the opinions and perceptions of the Income Tax Act, 2004 simplicity. Table1 presents the respondents profile.   The results show that 260 (84%) of the respondents were male and 48 (16%) were female. The findings correspond to the actual cultural environment in Zanzibar where females are supposed to stay home to look after children and other family matters. However, the 48 (16 %) females in the medium businesses indicate the growth of female businesses in Zanzibar. In the past it was difficult for women in Zanzibar to participate in business activities. The study also found that many of the respondents 126 (40.9%) were aged between 20 -35 years.  This indicates that more young people are entering into business. These findings are consistent with the idea that the SME sector is labour intensive and becomes the resort for many school leavers who are not employed by the government (URT, 2003). The findings of this study show that a majority of the medium taxpayers in Zanzibar, i.e. 100 (32.5%) hold a higher degree. There were 68 (22%) diploma holders, 84 (27.3%) had a bachelor’s degree, 26 (8.4%) had an advanced level or similar qualification. Regarding the source of tax knowledge, only 91(29.5%) of participants admitted to getting their tax knowledge from formal tax education. This indicates the capacity of medium taxpayers to read, understand and implement tax laws and requirements. Likewise, this study found that many medium taxpayers (150, 48.7%) are traders. This confirms the history of Zanzibar as the centre for business across eastern and central Africa (ZNCCIA, 2013). This study found that many [132 (42.9%)] of the medium taxpayer’s businesses were in existence for between 1 to 10 years. The results conform to the findings of many other studies that majority of SMEs fall between 1 to 10 years (Abaho, Begumis, Aikiriza & Turyasingura, 2017).

 

 

                         Table 1: Respondents’ Profile

                                

Variable

Profile                                       Frequency

Percentage

          (n=308)                            (%)                 

Gender

Male

260

84.4

 

Female

48

15.6

Age of respondents

Under 20

13

4.2

 

20 – 35

126

40.9

 

36 – 45

110

35.7

 

46 – 55

52

16.9

 

Above 55

7

2.3

Level of education

Secondary (Form 1-4)

30

9.7

 

Advance/VETA/Certificate

26

8.4

 

Diploma

68

22.1

 

Bachelor’s degree

84

27.3

 

Higher degree

100

32.5

Source of Tax

Knowledge                 Instructions in tax forms                                               93                                30.2

 

 

 

 

 

Friends

28

9.1

 

TRA Officers

67

21.8

 

Formal education

91

29.5


 

 

 

Other, e.g. Radio, TV, internet

29

9.4

Type of business

Trade

150

48.7

 

Hotel and Restaurants

52

16.9

 

Manufacturing

20

6.5

 

Other service

76

24.7

 

Tax consultant

10

3.2

Age of business

01 –10

132

42.9

(Years)

11 – 25

91

29.5

 

26 – 35

65

21.1

 

Above 35

20