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This study aimed at assessing the effectiveness of the use of Electronic Fiscal Devices (EFDs) in value added tax collection volume in Tanzania. The objectives of this study is to assess the performance trend of actual collection of VAT collection before and after the introduction of EFDs. The study used both primary data and secondary data which were obtained from TRA’s staff and registered VAT payers by using observation and interview as well as review some TRA documents and journals for the case of secondary data. Case study research design were adopted, the study setting was in Mbeya tax region consisting of 40 respondents out of 45. Qualitative research designs were used. However the purposes of this study was to assess the effectiveness of the use of machines and from the findings the machine was effectively used when it come up to the computation of VAT since the VAT was remitted in time to TRA this resulted to the increase in VAT revenue been collected as compared to the before the introduction of EFDs and the benefits of EFD machine to both TRA and VAT traders in collecting value added tax and payment of VAT was reported as reduce cost, assist on assessment of tax, simplify audit and verification of VAT return. To the tax payers, the benefits was to manage time, stock control, know sales and keeping records. The study concluded that the EFDs are effectively used although there some challenges encountered like price of machine is high and most of taxpayers can’t afford and recommended that the purchases of the EFD should be review downwards and the cost of repairing should be at a standard, there should be increase in education, awareness and motivation on use of EFDs as well as education of the importance of demand receipts, there should be comfortable environment between taxpayers and TRA officers as well as cooperation between them, and also there should be proper examination of the tax payer ability to pay tax together with proper estimation of tax to be paid by tax payers in order to bring fairness needed in tax system for creation of tax compliance among tax payers. |
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