FACTORS INFLUENCING SMALL AND MEDIUM ENTERPRISES (SMEs) COMPLIANCE ON ELECTRONIC FISCAL DEVICE USE IN TANZANIA:

Abstract

Small and medium enterprises are very significant in the economy from the role they play in employment creation and tax revenue collected from them. The study examined the factors influencing small and medium enterprises (SMEs) compliance on electronic fiscal devices (EFDs) use in Tanzania. The study was guided by three specific objectives, which are, to ascertain the extent to which poor record keeping affect SMEs compliance of EFDs use in Tanzania, to examine the extent to which high expenses on the device affect SMEs compliance of EFDs use in Tanzania and to determine the extent to which informality of the enterprises affect SMEs compliance of EFDs use in Tanzania. The quantitative data were collected using questionnaires from the sample of 95 respondent in Moshi municipal to make investigate to the correspond objectives. Data were analyzed using descriptive statistics and inferential statistics (multiple regression analysis). The result found that all independent variables (record keeping, expenses on the device and formality on the Enterprises) were significant joint predictors of SME compliance with correlation of 93% and adjusted R square equal to 85.8%. The researcher found a positive and significant relationship between records keeping and formality of the enterprises with SME's compliance to EFD. However, a negative significant relationship was observed between expanses on the device and SME's compliance. The researcher recommended that, The government should think of reducing the cost of acquiring the machines so that even small business may afford to purchase and use, which will further enhance the VAT collection to the government. Also the government should reduce the procedures in registration process to make sure significant number of small and medium businesses are registered which in turn will leads to effective revenue collection. Keywords: SME's, EFD, Compliance, Regression