A Dissertation Submitted in Partial Fulfilment of the Requirements for the
award of the Degree of Master of Business Administration (MBA) in Corporate
Management of Mzumbe University
This study aimed at assessing the administration of Value added tax (VAT) in Tanzania with reference to Mbeya City. This main objective was achieved with the following specific objectives: to identify the challenges facing business traders to register themselves voluntarily with VAT, examination of obstacles facing business traders in collecting the 18% from their customers, exploration of the factors making business traders to be reluctant in using EFDs, investigation of whether all eligible traders for VAT are actually registered and examining the knowledge of business owners on tax payment. The study used questionnaires, interviews and relevant documents to collect primary and secondary data. The study found that VAT implementation in Mbeya City of Mbeya Region has been facing a combination of challenges (problems) such as: misunderstanding of the public in general and business community in particular regarding the VAT laws. It was further found that there was resistance against registrations for VAT by some traders. Moreover, it was found that some traders provide understated financial statements, while others did not issue invoice or issued illegal invoices. It is thus concluded that there are various problems in administration of value added tax in Mbeya City. On the basis of these findings, the study recommends that the authority should train the taxpayers about the rules and regulations of VAT continuously and recruit new employees.