An Assessment of Effectiveness of Electronic Fiscal Devices (EFDS) in Enhancing Revenue Collection for the Government of Tanzania.

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 Taxpayers by using uestionnaires and interviews. Secondary data were obtained by reviewing some TRA documents. The study setting was Dar es Salaam City Council. Both descriptive and exploratory designs were used. The following are the reasons for adopting EFD machines arranged according to their order of priority: the desire to reduce tax collection costs, integration of taxation system with other administrative systems, creating standardization among the taxpayers as well as bringing in automation and innovation in the tax collection system. It was said that EFDs have helped to make taxation services available and accessible to many taxpayers. The devices were usable and reliable in the collection of taxes. The major challenges facing full implementations of EFDs were the 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 a review of purchasing price and maintenance costs downwards, an improvement in software and network breakdown, an increase of education, awareness, and motivation on use. However, there is the potential of having a great advantage and/or improvement in tax revenue collection using EFDs if the mentioned challenges would be addressed.