A Dissertation Submitted in Partial Fulfilment of the Requirements for Award of
the Degree of Master of Business Administration (Corporate Management) of
Mzumbe University
The purpose of this study was to assess the influence of use of Electronic Fiscal Devices
(EFDs) on Value Added Tax (VAT) collection among VAT registered traders in
Morogoro Municipality, Tanzania. The study sought to explore the status of EFD system
on improved VAT compliance, assess the quality of EFD system in relation to sealed
loopholes of VAT evasion as well as investigating capacity of the VAT registered
traders on the use of EFD machines. The research used a case study research design. Ten
percent (10%) of the target population was used as a sample size of this study. Using a
simple random sampling technique, 39 VAT registered traders were selected from a
population of 387 VAT registered traders and 11 Tanzania Revenue Authority (TRA)
officers who were the key informants of this study were selected from a total population
of 109 TRA officers working at Morogoro regional office. The main instrument of
collecting primary data were the questionnaires and interview while secondary data were
obtained from TRA. Analysis of data was done using descriptive statistics generated in
the Statistical Package for Social Sciences (SPSS). Empirical findings reveal that the
EFD system assisted in improvement of VAT compliance and the system was
ineffective in sealing the loopholes of VAT evasion. It was further found out that the
VAT registered traders were effectively trained on the use of EFD machines. Based on
the research findings the study has concluded the following: the use of EFD system has a
significant impact on the improvement of VAT compliance, the EFD machines were not
effective in sealing the loopholes for VAT evasion and the training given by TRA
through the suppliers and seminars increased the capacity of using the EFD machines.
The policy implication of this study is for the Government through TRA to come up
with more superior system which can detect any form of corruption, falsification and
fraud. More efforts are needed to increase the benefits of using the EFD machines and
remove the challenges of using these machines and other medias should also be used in training programme rather than focusing on suppliers and seminars only.
Keywords: Electronic Fiscal Devices, Value Added Tax, VAT registered traders.