Abstract:
The study assessed the effectiveness of value added tax (VAT) e-filling system in valued added tax
(VAT) compliance in Tanzania. The study was guided by three specific objectives namely to
determine the current situation of e-filling of VAT for compliance in Tanzania; to identify the
challenges of e-filling for VAT of compliance in Tanzania; and finally, to provide recommendations
to improve e-filling of VAT for compliance in Tanzania. The study was conducted using survey
design through quantitative methods since objectives results were used to facilitate knowledge
generation process. Data were collected from the employees from the tax authority in Arusha region
as the case study using structured questionnaires which with the results being assembled and
computed in the SPSS software version 23.0 for generation of significant statistics to present the
results of the study. Descriptive statistics were first generated to show the profile of the respondents
whereas they were also employed in generating results for the study based on the issue under
study. Findings of the study indicated that with the current situation regarding value added tax (VAT)
through e-filling system on compliance the law requires the payment of value added tax as the
procedure to be issued through the e-filling system. This makes compliance being a must and
compulsory among taxpayers. Also, with the challenges three predicting variables were identified
for testing towards value added tax compliance as the dependent variable. The predictors include
taxpayers’ response, information accuracy and monitoring and control. Findings indicated that all
three predicting variables were positive with significant effect statistically towards value added tax
(VAT) compliance. This is the case since compliance on value added tax has been noted to be
composed with shortcomings by taxpayers. Moreover, with the recommendations, they were stated
in the specific section as measures essential to improve the situation in the respective context
regarding the value added tax compliance through e-filling system in Tanzanian environment. The
implication is that value added tax (VAT) compliance through e-filling system is affected with the
taxpayer’s response, information accuracy and monitoring and control.
