masters thesisIt has been considered as a major source of income and governments are taking responsibilities of ensuring its collection is of success. To increase the efficiency of collections, governments have formed institutions which are direct dealing with revenue collection, for example in Tanzania the Tanzania Revenue Authority (TRA). The major source of income collected is through Value Added Tax (VAT) and other taxes. VAT has significance on the domestic economy and on government policies (especially fiscal policies (URT, 2010). To improve the corrections of VAT, TRA introduced the use of Electronic Fiscal Devises. The aim this study is to examine the electronic fiscal devices as a tool of enhancement of value added tax compliance in Tanzania. Very specifically on the effect of EFDs in filling, remittance and refund process to VAT collection, the effectiveness and efficiency of EFDs in VAT collection and the influence of EFDs in VAT compliance. The total sample of 130 respondents were selected, sample for this study was drawn from the complete list of all employees and VAT registered taxpayers at the Arusha Tax Region in total 10 employees from TRA Arusha Tax Region and 120 VAT registered traders were involved. In this study the researcher uses interviews, questionnaires, documentary analysis. Descriptive analysis was conducted as it allows data to be quantified analyses. The use of different tools like tables, graphs and percentages or means were utilized, also where necessary further analysis was conducted using cross tabulation. Chi- square was deployed as a measure of acceptance or rejection of the hypothesis. The study has the following findings EFDs do simplify the filling of returns mean of 1.56, do simplify remittance mean 1.97, do simply refund process mean 1.88 and EFD is time saving in tax payment activities in general mean 1.80. When ranked it was observed that EFDs do simplify the filling of return process than other activities followed by time saving in tax payment activities in general, then it simply refund process and lastly simplifies remittances. Further the findings show that EFDs do simplify the filling of returns at 41.28% calculated as mean of 3.44/5*60%. The 60% is taken because the mean 3.4375 is under the group of 41% to 60%, so the maximum value was taken to compute the mean percentage. vii The same concept has been used to calculate the other VAT payment activities. Therefore, EFDs do simplify the remittance by 39% calculated as 3.25/5*60%, simplify refund process by 17.28% calculated as 2.16/5*40%, and saves time for VAT payment activities in general by 31.44% calculated as 2.62/5*60% (60% is used because 2.62 can be approximated to 3 so possible maximum value is 60% not 40%). Moreover the effectiveness was measured in terms of low cost compared to VAT collected, register all EFDs hence more revenue collected, reducing much time and efforts in tax compliance and correct filled tax return. The findings on those measurements show that when EFDs is used it is of low cost compared to VAT collected mean of 1.06, that all EFDs are registered by TRA hence more VAT collected mean of 1.5, using EFDs have freed taxpayers from using much efforts in tax compliance mean of 1.5 and that all transactions are entered or recorded in EFDs hence fill the correct tax return mean of 1.97. The results show that taxpayers have required devices which include the Electronic Tax Register (ETR) also known as Electronic Fiscal Cash Register (EFCR), the Electronic Fiscal Printer (EFP) and the Electronic Signature Device (ESD) mean of 1.44. Also the results reveal that taxpayers and TRA has the specific budget to maintain the system or the devices mean of 1.16, and that have experts in operating the system and do attend the trainings mean of 1.38. when the output were measured the findings show that the output are achieved as there an increase in VAT collections, reduction of queuing time, EFDs do encourage VAT compliance and reduces costs of VAT collections. In conclusion EFDs do influence VAT collections or compliance for about 30% and that the positive relationship between EFD and VAT compliance do exist. From the e ANOVA results which show, a sig.0.120 it means there significant effect of EFD to VAT compliance compared to standard 0.05 of Cohen. Therefore, the hypothesis that said there positive relation between EFDs and VAT compliance has been accepted and the influence are measured at the rate of 30%. The researcher recommends that TRA should make comparison possible in the EFDMS and EFDMS must show the details of each transaction done.