Assessment of Effectiveness of Electronic Fiscal Devices (Efds) in Tax Collection in Tanzania; A Case of Arusha Region

Kapera, Mohammed Omari (2017) Assessment of Effectiveness of Electronic Fiscal Devices (Efds) in Tax Collection in Tanzania; A Case of Arusha Region. Masters thesis, The Open University of Tanzania.

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Abstract

This study aimed at assessing the effectiveness of Electronic Fiscal Devices (EFDs) in tax collection in Tanzania. The study used both primary data and secondary data which were obtained from TRA’s staff and registered VAT payers by using questionnaire and interview as well as review some TRA documents for the case of secondary data. The study setting was Arusha City Council. Both descriptive and exploratory designs were used. The study found that before introducing EFDs in Tanzania, revenue obtained from VAT registered taxpayers was growing. For that reason, the study accepted that there is the decrease of VAT-revenue collected following the introduction of EFDs. The reasons for adopting EFDs machine was found to be the following according to this order of priority the desire to reducing tax collection costs, integration of taxation system with other administrative system, create standardization among the tax payers as well as bringing automation and innovation in the tax collection system. It was said that EFDs has helped to make taxation services available and accessible to many tax payers. The devices were usable and reliable in the collection of tax. The major challenges facing full implementations of EFDs were high cost of purchasing the devices and lack of education on the side of taxpayers concerning the use of EFDs among others. The study concluded and recommended review of purchasing price and maintenance costs downwards, improvement on system or network breakdown, increase of education, awareness and motivation on use. However, there is the potential of having great advantage and/or improvement in tax revenue collection using EFDs if the challenges mentioned would be addressed.

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