Assessment On the Effectiveness of Value Added Tax E-Filling System in Enhancing Value Added Tax (Vat) Compliance In Tanzania

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.