Business Management Review

Income Tax Law Simplification and Tax Compliance: A Case of Medium Taxpayers in Zanzibar

Shuweikha S. Khalfan, Ernest Kitindi,, Henry Chalu — Tue, 30 Jun 2020 00:00:00 +0000

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.

Are Households in Kagera Region In Tanzania Vulnerable to Poverty?

Innocent Pantaleo — Tue, 30 Jun 2020 00:00:00 +0000

This paper uses the six wave Kagera Health and Demographic Survey (KHDS) panel data to examine whether or not households in Kagera Region were vulnerable to poverty in the period 1991 - 2010. Using the Kagera poverty lines for 1991 and 2010, the paper examines the extent to which variability in households’ incomes and consumption engendered the risks (as a measure of vulnerability) to poverty. The results show that risk to poverty was relatively low for the 1991 poverty line and high for the 2010 poverty line. This difference indicates that the risk of households falling into poverty tends to increase over time. However, when households in rural Kagera are analyzed separately, the results do not show variation between the two poverty lines, which implies that in the long run, stabilization of consumption is advantageous to poverty reduction. Thus, the government should strategically earmark resources for consumption stabilization and emphasize interventions that promote pro-poor farming.

Effects of Human Resources Management Practices on Supply Chain Flexibility: Evidence from Tourist Hotels in Tanzania

Gerald B. Magova,, Severine .S. Kessy — Tue, 30 Jun 2020 00:00:00 +0000

The study was designed to examine the effects of human resource management practices on supply chain flexibility. Specifically, it sought to determine the influence of participation practices, selective hiring practices, compensation practices, job security practices and teamwork practices on supply chain flexibility of tourist hotels in Tanzania. The study adopted a cross-sectional survey approach, where 228 respondents were involved. Hypotheses linking human resources management practices and supply chain flexibility were developed and tested using a structural equation modelling technique. The findings indicate that selective hiring practices, job security practices and teamwork practices have a significant positive influence on supply chain flexibility. The findings imply that employees with appropriate skills, knowledge, abilities and cultural fit, who are highly motivated through job security and compensation practices are important in ensuring supply chain flexibility in hotel settings. Therefore, directors and managers in the hotel industry are urged to deploy human resources management practices as strategies to increase supply chain flexibility as tactical measures to satisfy customers and win their loyalty.

Human Resource Management Practices and Employees’ Engagement in Small and Medium Enterprises in Tanzania

Judith Msangi, , Severine .S. Kessy,, Ernest Kitindi — Tue, 30 Jun 2020 00:00:00 +0000

Employees’ engagement is a very important concept in business management. It plays a vital role in determining the performance of business organizations including small and medium enterprises (SMEs). Despite its importance in business management, there is limited knowledge on how human resource management (HRM) practices influence the two major categories of employees’ engagement: job engagement and organizational engagement. This study examined the influence of HRM practices on employees’ engagement in Tanzanian SMEs. Data were collected from 483 SMEs using survey method and analyzed using Structural Equation Modeling (SEM). The results revealed that employees’ communication had positive influence on both organizational engagement and job engagement. Also organizational support had significant influence on both organizational engagement and job engagement. The conclusion is that the presence of support and communication are the only HRM practices which have a significant influence on both job engagement and organizational engagement. Hence, SMEs can use employees’ communication and organizational support to influence organizational engagement.

Determinants of Soft Drink Customer Satisfaction and Purchase Intentions: Comparison between Tanzania’s and South Korea’s Customers

Raina Marius, Robert Suphian, Dev Jani — Tue, 30 Jun 2020 00:00:00 +0000

The purpose of the study was to determine the influence of quality, social value, price, and attitude towards soft drinks on customer satisfaction and purchase intention by comparing Tanzanian and South Korean customers to reflect different business contexts. Data were collected using self-administered structured questionnaire directed to university students in the two countries. The data was subjected to Structured Equation Modeling using SmartPLS3 with multi-group analysis performed to decipher country differences in the hypothesized relationships. In the overall, attitude, price, and quality had a significant direct effect on satisfaction and indirect effect on purchase intention. Comparatively, attitude, price, and quality had significant direct effects on purchase intention in the South Korean group unlike in the Tanzanian group. In order to influence repurchase intention, marketers need to ensure their beverage customers are satisfied. Moreover, marketers for the two countries should use different marketing strategies to entice and satisfy customers. For the South Korean market, price offers higher leverage compared to the Tanzanian market in enhancing satisfaction and repurchase intentions. Reflecting convenience type of product, social value lacks significant effect on beverage purchase. The study offers unique comparative perspective on the determinants of beverage consumer buying behavior, thus complementing the previous studies taking a country perspective

Examining the Ability of Tanzanian Small and Medium Enterprises (Smes) To Increase Their Penetration into Export Markets

Beatrice .K. Mkenda,, John Rand — Tue, 30 Jun 2020 00:00:00 +0000

Tanzanian Small and Medium Enterprises (SMEs) face a number of hurdles that constrain their ability to increase their penetration into export markets. This finding emanates from analysing a sample of Tanzanian exporting SMEs from the World Bank’s Enterprise Survey Data for 2013. The analysis shows that only a few among the sampled exporting SMEs had internationally recognized quality certificates, used technology licensed from a foreign-owned company, spent on research and development (R&D) in the previous three years; and many were unable to enter export markets within three years of being established, that is, they are not born-global firms. The paper argues that the SMEs’ ability to penetrate into export markets faces three main constraints, namely, access to finance, electricity outages and numerous taxes. Thus, to enhance the SMEs’ ability to increase their penetration into export markets, policies should focus on easing the examined constraints. Firstly, there is a need to have policies for assisting exporting SMEs to access credit for expanding their activities and increasing productivity. Secondly, is to ensure that exporting SMEs get the required electricity through industrial parks that get preferential treatment in terms of general infrastructure. Lastly, the government should consider streamlining the taxes levied on these enterprises that hamper their operations. The implementation of these policies as a package would enable the SMEs to contribute more to generating export revenues and creating employment.

The Impact of Government Spending and Taxation on Economic Growth in Tanzania (1967 – 2017)

Ngong’ho Sende,, Wilhelm Ngasamiaku — Tue, 30 Jun 2020 00:00:00 +0000

This study seeks to examine the effect of government spending and taxation on economic growth in Tanzania for the 1967-2017 period. To achieve this objective, the study utilized secondary data and analyzed it using Augmented Dickey Fuller Test (ADF) and Phillips-Perron test statistics for unit root test and ARDL model for assessing effects on economic growth. Augmented Dickey Fuller Test and Phillips-Perron Test revealed that development expenditure, recurrent expenditure and income tax were initially not stationary at level but they became stationary after first differencing while real GDP was initially stationary at level. ARDL approach to co-integration bound test revealed that there was a co-integration among the variables. Moreover, ARDL revealed that there was significant evidence that, in the short run, recurrent expenditure and income tax negatively affected economic growth while development expenditure affected economic growth positively. The test also revealed that, in the long run, development expenditure had a positive and significant effect on growth rate while income tax had a negative impact. Likewise, recurrent expenditure had a negative and significant effect on economic growth. The study recommends that the government should increase the proportion of its annual budget on development expenditure so as to encourage aggregate demand and therefore influence a higher level of economic growth.