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Customers play an important role in shaping firms’ VAT compliance

Value added tax (VAT) is one of the main modes of raising tax revenue worldwide but has significantly underperformed as a revenue collection tool in Africa. Non-compliance by taxpayers is a major challenge. This Misum Academic Insight explores the extent to which Tanzanian businesses are VAT compliant and the factors explaining compliance.

This Academic Insight is based on the research article “The customer is king: Evidence on VAT compliance in Tanzania” published in 2020 in the journal World Development.

The study was conducted in the commercial capital of Tanzania, Dar es Salaam, in collaboration with the Research Policy and Planning Department of the Tanzania Revenue Authority (TRA).


Odd-Helge Fjeldstad, Chr. Michelsen Institute, Norway and African Tax Institute, University of Pretoria, South Africa

Cecilia Kagoma, Research, Policy and Planning Department, Tanzania Revenue Authority

Ephraim Mdee, Research, Policy and Planning Department, Tanzania Revenue Authority

Ingrid Hoem Sjursen, Misum Affiliated Researcher with the Human Capital and Sustainable Development Platform and Postdoctoral Researcher at Chr. Michelsen Institute, Norway

Vincent Somville, Norwegian School of Economics and Chr. Michelsen Institute, Norway