Title:
Influence of Excise Duty on Tax Revenue Collection in Tanzania

Authors:
Heriel E. Nguvava and Lyafufifye Anyambilile, Tanzania

Abstract:

This study assessed influence of excise duty on tax revenue collection in Tanzania. Specifically established relationship between excise duty and tax revenue collection and determine the causality of excise duty on tax revenue collection in Tanzania. The study employed quantitative descriptive design whereby a quantitative approach and longitudinal research strategy were used. Only secondary data was collected from Tanzania Revenue Authority (TRA) for the period of 2010/2011 to 2020/2021. This study used descriptive statistics and inferential statistics (OLS and Pearson Correlation) to analyze the first, and second objectives. The findings revealed that, there is strong positive relationship between excise duty and revenue collection in Tanzania. Further findings from the OLS revealed excise duty to have a significant influence on the total tax revenue whereby a unit increase in excise duty resulted into increase in total tax revenue collection by 0.732 unit. The study recommends that there should be a continuous review of the fiscal policies governing excise duty so as to address challenges brought by changing circumstances and enhance its contribution to the revenue collection. It also recommended, the government to amend the Excise Act to include a schedule for charging excise duty on services and provides clarity on point tax of excise duty on services like telecommunication and money transfer hence avoiding current confusion among tax payers. To raise excise duty and overall tax collection in Tanzania, TRA must emphasize on tax education and awareness sessions through multiple medias to promote voluntary tax compliance to all categories of taxpayers. 

DOI: https://doi.org/10.51505/IJEBMR.2024.81212