Effect of Electronic Fiscal Devices on VAT Collection in Tanzania: A Case of Tanzania Revenue Authority (original) (raw)
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Effect of Electronic Fiscal Device Machines on Domestic Vat Revenue in Tanzania
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This study aimed to investigate the effect of introducing EFD machines on domestic VAT collection in Tanzania. The study combined both quantitative and qualitative design. The quantitative part used a time series data covering the period of 20 years from 1998 to 2017 inclusive. Qualitative information involved key findings from Key Informant Interviews (KIIs) with tax-payers and tax collectors. The Descriptive analysis as well as regression analysis was used to analyze key findings of the study. Findings on the mean difference between the period before EFD and the period after EFD showed a significant effect of TZS 1,087,141 of domestic VAT per annum. The Hedge’s and granger effects size revealed an effect size of about 3% domestic VAT per annum. Further, the Johansen test for cointegration revealed both short run and long run relationship between EFD and Domestic VAT collection. Despite significant effect of EFD on domestic VAT, the study also identified some challenges of EFD whic...
IMPACT OF ELECTRONIC FISCAL DEVICES TOWARDS REVENUE COLLECTION IN TANZANIA
OLVA ACADEMY, 2022
This study aimed at examining the Impact of Electronic Fiscal Devices Towards Revenue Collection in Tanzania: A Case Tanzania Revenue Authority-Arusha Region. The study found that there exists a statistically significant positive relationship between tax compliance using EFDs and revenue collection and there exist a statistically significant positive relationship between tax information transmission using EFDs and revenue collection. The study also found that there is statistically significant positive relationship between efficiency and effectiveness of EFDs and revenue collection. The study concludes and recommends that the introduction of EFDs machines to taxpayers has been seen as an effective way to solve the problem of non-compliance and raise government revenues. Further studies are recommended especially on willingness of taxpayers to use EFDs, how to combat tax avoidance or evasion through the use of EFDs, Effective use of EFDs, EFDs administration costs versus benefits accrued.
The customer is king: Evidence on VAT compliance in Tanzania
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Like governments in many other African countries, the Government of Tanzania has been striving to improve the effectiveness of its value added tax (VAT) regime by reducing tax evasion through a combination of measures, including improved tax legislation and more effective administrative processes. A key initiative was the introduction of Electronic Fiscal Devices (EFDs) in 2010. It was expected that the new technology would be beneficial to both the Tanzania Revenue Authority (TRA) and business people by improving VAT compliance and reducing administrative and compliance costs. However, VAT collection has not improved as expected. In this paper, we examine EFD compliance among businesses that have an EFD and identify factors that influence compliance. An innovation in this study is that the research design allowed us to directly observe EFD usage, an important aspect of VAT compliance. Our enumerators waited for customers departing from business premises, and then checked their receipts, interviewed them and interviewed the businesses. This design enabled us to observe each business's actual compliance in issuing EFD receipts, thus circumventing the problem of dishonest reporting, which is common in self-reported survey data. We find that EFD compliance is strongly associated with the customer's perception of detection and penalty risks, and with the business operator's perception of other businesses' compliance behaviour.
Assessment of the impact of electronic fiscal devices on compliance and VAT collection in Malawi
2021
The study examined the effectiveness of using electronic fiscal devices (EFDs) in revenue collection and compliance. The study used a quantitative approach for the analysis. Timely filing of tax returns was used as a measure of compliance whereas value-added tax (VAT) revenue collection as a percentage of gross domestic product (GDP) was employed as a measure of revenue collection performance. The data used for the analysis covered July 2005 to June 2019. A sample of 318 taxpayers was used for the analysis of the level of compliance and revenue collection. The sample included a segment of 244 taxpayers using EFDs and 74 taxpayers without EFDs all being small and medium taxpayers. The results indicated that using VAT collection has not increased revenue collection in the period under review as evidenced by a decline after the EFDs were rolled out. The study also found that the mean of growth of VAT revenues in the two periods (preand post-EFD implementation) does not reveal any signi...
2018
The Government of the United Republic of Tanzania introduced EFDs since year 2013 in its second. The second phase includes non VAT registered traders administered under The Tax Administration Act 2015, to replace the Electronic Cash Register. The operations under Electronic Cash Register did not meet the desired expectations, including tax collections, and administration of the system. The newly introduced EFD has been prepared to cater for the inefficacies inherent in the former system of tax collection. The purpose of the study was to assess the perceptions of tax payers on the adoption of Electronic Fiscal Devices in revenue in Arusha municipality. The study focused on analyzing the benefits of adopting EFDs in revenue collection in Arusha Municipality, identifying challenges towards adopting EFDs in revenue collection and suggesting measures to overcome the challenges associated with adopting EFDs in revenue collection in Arusha Municipality. The study adopted both quantitative ...
The African Journal of Information and Communication
Domestic revenue collection through taxation is still below its potential in many Sub-Saharan African countries. In an attempt to boost their tax revenues, many national governments have deployed electronic fiscal devices (EFDs) to improve value-added tax (VAT) collection. However, there is evidence indicating that the deployment of EFDs in some African countries has encountered substantial challenges. Using the systematic review method, the research described in this article investigated challenges encountered in adoption of EFDs in Kenya and Tanzania. The review concludes by modelling recommendations, extracted from seven existing studies, in terms of the technology-organisation-environment (TOE) framework (Tornatzky & Fleisher, 1990). This model is an effort to provide a potential guide for successful EFD adoption in East Africa.
International Journal of Academic Research in Business and Social Sciences
Most of developing countries rely on fiscal instruments in running their government's operations; main source of public revenue in these countries is taxes. This study evaluated the taxpayer's perceptions on the use of Electronic Fiscal Devices (EFDs) by analyzing the benefits of using EFDs in revenue collection; the perceptions of taxpayers towards the use of EFDs and challenges towards the use of the EFDs in revenue collection. The study adopted the survey research design and the sample size of 75 taxpayers was used. The findings show that majority of taxpayers' demonstrated advantages of using EFDs machine in revenue collection. The study findings reveals that EFDs has reduced the time it takes to prepare sales report, secure tax information for auditing purpose and transaction; and ensure tax rate to be paid by the taxpayers. The challenges faced by EFDs users includes high prices of EFD machines, faint fiscal tax invoices, EFD's network problem, lack of taxpayer's education EFDs applications and few suppliers of EFDs machines. The study recommend Tanzania Revenue Authority (TRA) to conduct trainings and workshops with taxpayers on EFDs application; to provide incentives to encourage taxpayers' adoption of EFDs; to ensure sensitization, education and training programs are promoted to taxpayers' awareness in on EFDs system in friendly manner. Finally, the government through fiscal laws should make sure that all qualified taxpayers are enrolled on the use of EFD machine.
2016
In Ethiopia, ETRs machines use has become mandatory, following the reforms made on VAT administration. This study aims at understanding the impact of ETRs machines on VAT compliance among VAT registered taxpayers empirically, in Amhara National Regional State, taking the case of the city of Bahir Dar. The study used a sample of 176 VAT registered taxpayers and thus uses ETRs machines in the study area. Simple random sampling technique was used to draw the samples from the total target population. Primary data were collected with the help of Likert type items, each with a 5-point scale, running from “Strongly agree ” to “Strongly disagree ” from respondents. The collected data have been analyzed with the help of SPSS version 21. The Multiple Logistic Regression analysis was employed to predict the likely impact of using ETRs machines on VAT compliance in the target population. The results from the Multiple Logistic Regression analysis show that use of ETRs machines among VAT register...
International Journal of Engineering, 2019
Value Added Tax (VAT) as one of the important sources of government revenue, its implementation in Tanzania is at its infant stage. This study tried to explore the major problems and prospects of VAT implementation in Iringa Municipal. By considering the population size and availability of large numbers of VAT registered business firms, a total of 57 respondents from VAT collectors (registered business firms) and 44 respondents from VAT payers (consumers) were considered. The data gathered from both business tax payers and ultimate consumers were analyzed using software package of the SPSS version 20. In addition to this, to capture and incorporate all the non-quantifiable data and triangulate the data obtained through survey questionnaire, qualitative data analysis was employed. The results of the study indicated that the willful registration of the businesses has not yet come to the desired level, there is negative perception about the fairness of the payment through the businesses, substantial decline in the number of the customers following the implementation of VAT has been observed, many consumers believe that VAT has been the very motive for business firms to enforce higher price on products or services delivered.
Academy of Entrepreneurship Journal, 2020
This study determined the impact of taxpayer perceptions, in the form of the fear of punishment by the Tanzanian Revenue and Government authorities, on the rate of using Electronic Fiscal Devices (EFDs) among small business owners in Tanzania. As a result, the study sample was refined to include 279 small business owners, who are based in Arusha region. The key objectives of the study were to determine the categorical relationship between demographic characteristics and the fear of punishment, as well as to determine the impact of the fear of punishment on the rate of using EFDs. The study used the quantitative approach in addressing the objectives by employing the chi-square, ANOVA and ordinal regression as analytical techniques. Results of the analysis suggested no significant categorical relationship exists between demographic variables (the age, gender, and level of education) and the fear of punishment. Furthermore, the fear of punishment does not impact the rate of EFD use. The study recommends that the Tanzania Revenue Authority should not use age, gender, and level of education to determine the effectiveness of punishment among small business owners. Furthermore, the Tanzania Revenue Authority should not use intimidations as a method to impact compliance. The study forms part of the Ph.D thesis work of Ms Agnes Malima.