Trust is a foundational component of any tax system, particularly in environments where enforcement capacity is weak. In Tanzania, businesspeople exhibit low levels of trust in tax authorities, undermining voluntary compliance and weakening the legitimacy of the tax system. However, trust is not static; it can be built – and rebuilt – through better services, greater fairness, and efforts to foster interpersonal trust among taxpayers. Based on insights from a comprehensive business survey, this brief identifies key determinants of trust in the tax system and offers concrete policy recommendations to enhance taxpayer confidence and institutional legitimacy.
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Trust in tax administration: Why it matters for tax compliance