An Assessment of Challenges Facing the Adoption of Electronic Fiscal Devices for Revenue Collection in Zanzibar:

Abstract

The majority of developing nations rely on fiscal devices to run their governments, revenue is the main source of public funding in these nations. However, the implementation of EFDs is not done without challenges. So, the overall objective of this study was to assess the challenge facing the adoption of EFD for revenue collection in Zanzibar. Specifically, the study is to examine taxpayers’ negative perceptions of the use of EFDs in revenue collection, to examine the price challenge associated with EFDs among taxpayers in revenue collection, and also to examine the breakdown of system and technical support of the use of EFDs in revenue collection. This study used cross-sectional design. It’s including a mixed approach. Simple random sampling and purposive sampling techniques used to get respondents. Data were analyzed using statistical software for data sciences (STATA) version 17.0 represented in simple descriptive statistics such frequencies and percentages The findings showed that taxpayers were facing challenges in using EFD machine includes price of EFDs was high, networking problem, delay maintenance, software problem, power outage, tax payer not having enough education on the importance and uses of EFDs in revenue collection. Also, majority of respondents had a negative perception toward the use of EFDs, they believed EFDs were not an effective means of revenue collection, it causes over taxation, EFDs do not reduce fraud and corruption, and EFDs are sold at high cost for some traders to afford. It is recommended that ZRA should introduce EFDs that have no or less network breakdown, reduce or subsidize the prices of EFDs, organize tax education to taxpayers, more training on how to use EFDs, the government through ZRA should work together with other stakeholders particularly business people in order to eliminate critical challenges facing the stakeholders.