A Compulsory Research Report Submitted to the Faculty of Law in Partial Fulfillment of the Requirements of the Award of a Bachelor Degree of Law (LLB) of Mzumbe University
This study assesses effectiveness of the law in enhancing tax compliance through the use of EFDs machines and its impacts toward revenue collection in Tanzania. Introduction of the use of EFDs machine brought some changes in tax law where the government decided to add some provisions in tax law and regulation was made to regulate the use of electronic fiscal devices by the taxpayers who are traders or service providers. It is from this aspect the researcher decides to conduct this research so as to see how these law regulate the use of EFDs machine and what are their impacts increasing tax compliance and revenue collection.
This research was done through questionnaire, interviews, with the sample size of 60 respondents selected from business men and women, TRA officer, tax consultants service users. The researcher interviewed 20 respondents for a specific question,
while 40 respondents were provided with questionnaires to answer question asked
there on.
From research it was found that, the tax law has managed to increase tax compliance
through the use of EFDs machine and increase of revenue collection in the country
despite the fact that there are still some gaps which are needed to be covered for the
law to operate smoothly. The weakness side which was found in this research, is that
there are provisions of tax laws which provide the use of EFDs machine and
punishment for the tax payers not to use EFDs machine which need amendment for
the law not to create any room for tax payer to try avoiding paying tax, it was found
that the punishment provided by the law to the tax payer not using EFDs machine is
not reliable to make the taxpayer fear to commit acts which may amount to tax
avoidance. Other different factors were raised in this research which make law not to
operate smoothly, those factors include, little awareness of the taxpayers on tax laws
and required procedures make taxpayers not to use EFDs machine as required by the
law because they do not know what they are required to do by the law. Lack of
commitment of tax officers in their works, negative perception of taxpayers in using
EFDs machines, and lack of enough knowledge by the taxpayers in using EFDs
machine.
At the end of the research, the researcher recommended that the provision of the law
should change in order for it to be more effective in providing for the use of EFDs
machine so as to increase tax compliance and revenue collection. Secondly, tax payer
should be educated so as to improve their awareness on tax laws and required
procedures. Thirdly the authority responsible (TRA) should try much as they enforce
law accordingly.
The recommendation of this research if will be put into consideration will help the
government in increasing revenue collection of the country, with the collected
revenue can help in restructuring the economic, social and political sector. Again by
making changes in the law will help to improve legal framework of the country.