Perceived Fiscal Exchange and Tax Compliance: Evidence from Large Corporate Taxpayers in Tanzania

Authors

• Susan Kiyenze, University of Dar es salaamFollow
• Mariam Nchimbi, University of Dar es SalaamFollow
• Said Suluo, University of Dar es SalaamFollow

Abstract

This paper examines the relationship between perceived fiscal exchange (PFE) and Tax Compliance (TCO) among large corporate taxpayers in Tanzania while drawing on the Fiscal Exchange Theory (FET). The study on which this paper is based employed a quantitative research design and analysed data using Partial Least Squares Structural Equation Modelling (PLS-SEM) with a sample of 215 large corporate taxpayers in Tanzania. We find that the FET framework has modest explanatory and predictive power (R² = 0.152, Q² = 0.020). Perceived Fiscal Exchange (PFE) has an insignificant effect on tax compliance of large corporate taxpayers (p=0.123). This suggests that perceptions of fiscal exchange do not necessarily drive large corporations’ tax compliance. By providing empirical evidence from a developing-country context, the study contributes to the tax compliance literature and contends that a more robust model warrants exploration. Moreover, we caution policymakers about the poor performance on the government’s side of the fiscal exchange, particularly for large corporate taxpayers, which inevitably calls for improvement.

Recommended Citation

Kiyenze, Susan; Nchimbi, Mariam; and Suluo, Said (2026) "Perceived Fiscal Exchange and Tax Compliance: Evidence from Large Corporate Taxpayers in Tanzania," Business Management Review: Vol. 29: No. 2, Article 2.
DOI: https://doi.org/10.56279/bmrj.v29i1.1032
Available at: https://commons.udsm.ac.tz/business-management-review/vol29/iss2/2