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This report is the result of the research on effectiveness of tax collection through enforcement of EFD machine on both VAT and non-VAT registered traders conducted at Tanzania Revenue Authority Kariakoo Tax Region. Before the adoption of EFDs machines, TRA were assessing the taxpayer’s income tax based on the kind of business taxpayers conduct which led to the compliance on assessment being unfair. In dealing with taxpayers’ compliance and tax avoidance behavior, TRA adopted EFD machines on July 2010. The machines were first implemented by VAT registered traders and then followed by non-VAT registered traders. Still, taxpayers complain that the tax assessed for their income to be not fair to keep them growing. This influenced me to go for research to determine the effectiveness management of tax collection through the enforcement on the use of EFD machines at Kariakoo Tax Region.
The general objective was to determine the effective management of tax collection through the enforcement on the use of EFD machines on both VAT registered and non-VAT registered traders. The specific objectives of the study were to assess the adoption and usage rate of EFD machines by traders, to assess the impact of EFD machines in revenue collection, evaluate the challenges that traders and TRA officers face in operating with EFD machines and examining the support provided by TRA to traders operating with EFD machines.
The study used informal interviews, observation, and Questionnaires methods to collect primary data from the field, and documentary review to collect secondary data. Also, Microsoft excel was used to analyze the data collected and then displayed in tables, histograms, and pie charts.
It was concluded that the effective EFD uses has been hindered by some challenges such as the higher price to acquire the machine, poor after sale service, frequent breakdown of machines and lack of enough awareness on how to operate the EFD machines. These challenges have been reducing the trader’s morale towards effective EFD’s uses.
The study recommends that TRA should put more effort on reducing the challenges that the EFD users faces to attain the effective revenue collection from EFD machine uses. |
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