E-commerce and tax compliance in Tanzania: an empirical analysis of Dar-es-Salaam city

Tax compliance in the e-commerce era has sparked global discussion, particularly regarding the determination of taxable income and the management of tax collections. Previous studies examined the main factors relating to e-commerce actors’ tax compliance, leaving a gap in the factors influencing tax compliance behaviour among e-commerce owners. Using a cross-sectional design, this study examines the determinants of tax compliance among e-commerce actors in Tanzania. Data were collected from 385 respondents using self-administered questionnaires and analysed using a binary logistic regression model. This study demonstrates a strong association between e-commerce tax compliance and e-commerce tax knowledge, e-commerce tax awareness, e-commerce tax fairness, and quality tax services and compliance. These results underscore the importance of e-commerce owners’ tax compliance behaviour in enhancing e-commerce tax compliance and reducing possible tax revenue losses for governments. The results shed light on shifting the focus from a conventional tax-collection business model to an e-commerce model. Additionally, the study emphasises the importance of tax authorities and governments in raising public awareness and education regarding e-commerce tax compliance.