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This study intended to assess factors affecting digitalization of tax systems on tax compliance among small businesses in Tanzania. The study employed a case study design with both quantitative and qualitative research approaches. The study employed a sample of 243 small businesses based on simple random sampling. The study used online questionnaires to collect data, conducted analysis using descriptive statistics for qualitative data and Stata analytical tool for quantitative data. The study findings have revealed that the cost of e-tax infrastructures influences tax compliance, high cost of infrastructures, accessories, software and hardware render e-tax services expensive, thus affecting it negatively; taxpayers’ knowledge of e-tax application systems influence tax compliance, poor knowledge of e-tax application systems effects compliance negatively due to poor usage of the applications; and small businesses’ attitudes on e-tax application systems affects tax compliance due to dislike of associated e-tax application systems’ problems. It is recommended that reasonable costs of electronic tax infrastructures, proper education and training on electronic tax systems, and change of taxpayers’ attitude through reliable electronic tax services will enhance electronic tax compliance.

ACKNOWLEDGEMENT	i
DEDICATION	ii
List of tables	iii
List of abbreviations	iv
Table of contents	v
ABSTRACT	viii
CHAPTER ONE	1
INTRODUCTION AND PROBLEM SETTING	1
1.1 Introduction	1
1.2 Problem statement	2
1.3 Research Objective	4
1.4 Research questions	4
1.5 Hypotheses	4
1.6 Significance of the study	4
CHAPTER TWO	6
LITERATURE REVIEW	6
2.1 Introduction	6
2.2 Definition of Key Concepts	6
2.3 Tax System and Revenue Mobilization	8
2.4 Digitalization of Tax System in Tanzania	8
2.5 Importance of Digitalization on Revenue Increase	9
2.6 Theoretical Review	9
2.7 Empirical Review	10
2.8 Conceptual Framework	12
CHAPTER THREE	14
METHODOLOGY	14
3.1 Research Design	14
3.2 Study Area and target population	14
3.3 Types and sources of Data	14
3.4 Data collection method	15
3.5 Data analysis	15
CHAPTER FOUR	16
PRESENTATION OF FINDINGS	16
4.1 Introduction	16
4.2 Demographics influences	16
4.3 General topical issues	20
4.4 Specific topical issues	23
4.5 Regression analysis using Stata	28
CHAPTER FIVE	31
DISCUSSIONS ON FINDINGS	31
5.1 Introduction	31
5.2 The cost of e-tax infrastructures on tax compliance	31
5.3 The influence of the taxpayers’ knowledge on tax compliance	32
5.4 The influence of taxpayers’ attitude on tax compliance	32
CHAPTER SIX	34
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS	34
6.1 Introduction	34
6.2 Summary of findings	34
6.3 Conclusion	34
6.4 Recommendations	35
6.5 Area for further research	35
REFERENCES	37
Appendix : Survey Questionnaire	40