Factors Influencing the Adoption of Electronic Tax Payment Systems among SMEs in Bagamoyo District, Tanzania

Abstract

Adoption of electronic tax (e-tax) payment systems among Small and Medium-Sized Enterprises (SMEs) in Tanzania remains low despite government initiatives such as the Tanzania Revenue Authority’s Electronic Filing System and the Finance Act 2022. This study assessed factors affecting e-tax adoption in Bagamoyo District using a quantitative method approach with 280 respondents selected systematically. Descriptive and inferential analyses were applied to examine influencing factors. The findings revealed key barriers, including low digital literacy, infrastructural gaps, and weak policy enforcement. Inferential results indicated that awareness of regulatory measures significantly promotes adoption (β = 0.550), while trust (β = -0.850) hinder uptake with p < 0.001. The study recommends awareness campaigns, technical support, and community advocacy. This study contributes to digital taxation policy and supports transparent, efficient governance aligned with the Sustainable Development Goals.