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This study aimed to assess the effectiveness of Electronic Fiscal Device (EFD) in the
collection of Value Added Tax. The study aimed to establish if the Electronic Fiscal
Device had increased the collection of VAT and if there are any associated costs in
using them. However the general purpose of this study was to determine by how
much EFD has increased or decreased the collections of VAT since its introduction
in 2010. The population under study comprised of 260 VAT registered taxpayers
with EFD in Morogoro according to the regional TRA office’s records. The main
instrument of collecting primary data was questionnaires while secondary data were
obtained from the TRA regional office. Analysis of data was mainly done using
descriptive statistics. The findings (EFDs have contributed to VAT collection) of this
research project will assist the Tanzania Revenue Authority on looking ways of
improving the collections of VAT and ways of administering and using of EFD by
VAT traders. Data were collected from 80 registered VAT traders in Morogoro town.
Out of the 80 registered VAT traders to whom the questionnaires were administered,
80 of them responded to the questionnaires except to some questions which seemed
to be difficult. This gave a response rate of 100 percent. Based on the results from
data analysis and findings of the research, one will safely conclude the following;
First, Tanzania has witnessed significant changes in many aspects of its economy
over the last five years, but like most developing countries, it has had to contend with
the common problems that plague tax systems of developing countries (Karingi,
Wanjala, and Dec, 2005).
Second, there is net increase of 38% in VAT collections since the introduction of
EFD as per Morogoro tax region based Morogoro town. Third, EFDs are not cost
effective to VAT traders on using them. Fourth, EFD is cost effective for the revenue
authority in terms of acquisition and administration. Fifth, EFDs have so many
challenges and problems to traders, and the revenue authority. Sixth, traders are not
aware of their legal obligation over the usage of EFDs. Seventh, EFD regulations are
not properly complied by taxpayers. Eighth, involuntary tax compliance and other
EFD challenges were the major reasons to why traders are not complying with the
EFD provisions. |
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