Abstract:
The study examined the impact of tax audits on the burden of proof on
examined returns of income among SMEs in Dar es Salaam City in Tanzania.
Specifically, the study intended to examine how the issued notice of
deficiencies affects the burden of proof on taxpayers on the production of
evidence and persuasiveness to the tax authority. The study applied a cross sectional design and quantitative and qualitative approach, where, data were
collected from targeted respondents and analysed quantitatively to establish
the relationships between variables. Data were analysed through a descriptive
statistical method and presented in frequency tables. Primary and secondary
data were collected through a combination of methods including key
informant interviews, structured questionnaires, and focus group discussions.
The study revealed that education level has a greater impact on tax audit
notice of deficiencies and taxpayers’ burden of proof from the examined return
of income point of view. The education level of the respondents indicates
that 41 (60%) out of 68 of the respondents had a primary education level. The
study concluded that understanding the impact of a tax audit with respect to
notice of deficiencies, the burden of proof, and audited taxpayers’ perception
from the examined returns of income can influence tax compliance once
taxpayers have basic tax laws education. Specifically, by understanding better
why taxpayers usually bear the burden of proof, the tax authority will be in a
position to use appropriate measures that will bring in balance the burden
born by taxpayers on the production of evidence and persuasiveness to tax
officers. The study recommends that tax authorities with other stakeholders
such as tax consultants, accountants, and auditors should ensure taxpayers
are equipped with basic tax laws education from their childhood, at primary
schools, and post-primary schools
