Effect of electronic fiscal devices on vat collection in Tanzania: a case of Tanzania Revenue Authority

Abstract

The study sought to assess the effect of implementi ng Electronic Fiscal Devices in VAT collection in T anzania. The study analysed the importance of Electronic Fis cal Devices to TRA, taxpayers and other stakeholder s with the aim of determining the impact of Compliance Che cks using Electronic Fiscal Devices on VAT collecti on in Tanzania, to establish the effect of Roll Out of El ectronic Fiscal Devices on VAT collection in Tanzan ia and to evaluate the effectiveness of Enforcement of Electr onic Fiscal Devices on VAT collection in Tanzania. The study utilized secondary data obtained from 391 tra ders registered at TRA and utilizing Electronic Fis cal Devices. The study adopted a descriptive research d esign. Preliminary data analysis was conducted as a pre requisite to running regression analysis. The data collected was computed using STATA SE 12.1 and the output presented in form of tables. To answer the researc h objectives and hypotheses regression analysis was utilized where variables of the study were only able to expl ain 62.18% of the change in VAT collection and a 37 .82% of the change being explained by other factors. The re gression coefficients were negative for Compliance (- 2.045778), positive for Roll out (2.040379) and pos itive for Enforcement (19.11515). Our variables of interest, that is, Roll out was statistically significant wit h a p-value of 0.038 while Compliance and Enforceme nt are statistically insignificant with the p-values of 0. 055 and 0.188 respectively which are greater than a significant level of 0.05. The study found out that there is st atistically significant relationship between Roll o ut and VAT collection. However, enforcement of EFDs and compli ance check were found not to be significant related with VAT collection at 5% level of significance. The stu dy recommends further longitudinal studies on the e ffects of roll outs, compliance checks, and implementation of Electronic Fiscal Devices on VAT collection in Tan zania