Assessment Of The Attitudes And Perceptions Of Taxpayers Towards The Use Of Efd Machines In Tanzania: A Case Of Arusha City

ABSTRACT

This study aimed at assessing the perception and attitudes of the Taxpayers on the use of Electronic Fiscal Devices (EFDs) in Tanzania. The objectives of the study were: to analyze trend performance of VAT collections before and after the implementation of Electronic Fiscal Devices in Tanzania in the period 2006-2014; to assess the perception of taxpayers on the effect of Electronic Fiscal Devices (EFDs) to their business in the study area; to find out challenges associated with the use of Electronic Fiscal Devices (EFDs) in revenue collection in the study area; to establish measures that can be taken to improve the use of EFDs machines in tax collection. Data for this study were obtained using triangulation research design. The study used Descriptive, exploratory designs and cross-sectional survey where simple random sampling and purposive sampling were used to select respondents from 120 respondents who were 100 taxpayers and 20 TRA staff. A combination of qualitative and quantitative methods wasused to collect data for this study through a short questionnaire and interview guide. The study used both primary data and secondary data which were obtained from TRA’s staff and registered VAT tax payers by using questionnaire and interview as well as reviewing some or the TRA documents for the case of secondary data. The study setting was Arusha City Council. Quantitative data were analyzed by using Statistical Package for Social Sciences (SPSS 16.0) and Excel computer programme, while qualitative data were analyzed using content analysis. Descriptive statistics such as frequencies and percentages were used. The study found that before introducing EFDs in Tanzania, revenue obtained from VAT registered taxpayers was on increase, though at a slow rate. The study results show that there is anincrease in VAT-revenue collected following the introduction of EFDs. It was reported during the study that EFDs have helped to make taxation services available and accessible to many tax payers. The devices areusable and reliable in the collection of tax. The major challenges facing full use of EFDs are high cost of purchasing the devices and lack of education on the side of taxpayers concerning the use of EFDs among others. The study concludesand recommends review of purchasing price and maintenance costs, 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.