An evaluation of the factors affecting Value Added Tax (VAT) revenue collections in Tanzania:
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Date
2015-06
Authors
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Journal ISSN
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Publisher
Kampala International University, College of Economics and Management
Abstract
The study focused on the evaluation of the factors affecting the Value Added Tax revenue collection with the view of assessing the levels of taxpayers’ knowledge, the level of tax evasion and compliance since it was introduced. Moreover, the study investigated the effectiveness of the administration in addressing the problem with particular reference to how effective is the tax payers registration system, effectiveness of VAT return filing and tax education services.
The study revealed that taxpayers are not registering voluntarily unless they believe that it is beneficial for them to register, many taxpayers eligible for VAT registration are still not included in the tax net, policymakers concentrating on increasing tax collections targets on known and existing taxpayers. All these are due to ineffective registration system and inadequate tax staff to bring more eligible taxpayers into tax net and broaden the tax net.
The study also showed that some taxpayers’ declaration in VAT returns are not correct and VAT self-assessment is unreliable, tax evasion through non-issue of tax invoices or receipts are common and the general public is not aware of the need to demand tax invoices or receipts when purchasing goods. Tax education and audit have not enhanced the level of voluntary compliance.
The study recommends taxpayers education to enhance compliance to tax laws, tax education on return filing, effectiveness of the tax registration system, dissemination of awareness to the general public on the need to demand tax invoices or receipts when purchasing goods and the need to conduct tax audits with a view to detecting incidences of tax evasion.
The study leaves the room for further study such as zero rated supplies, Exempt supplies special beliefs, Tax evasion by small business operators who are not eligible for VAT registration, Tax evasion of taxes and duties through under valuation of imported goods and tax evasion of taxes and duties through under valuation of imported goods and Tax evasion of taxes and duties through smuggling across boarder stations.
Description
A Research Dissertation Submitted to the College of Economics and Management in Partial Fulfillment of the Requirements for the Award of Bachelor’s Degree of Arts in Economics of Kampala International University
Keywords
Value Added Tax (VAT), Revenue collections, Tanzania Revenue Authority (TRA) Mwanza, Tanzania