Abstract:
The Electronic Fiscal Device (EFD) Machines have been operating in Tanzania since the year
2010 for the purpose of helping the Tanzania Revenue Authority (TRA) to increase revenues
from tax collection. Regardless of years of its existence, there are still reported cases of tax
evasion and this study was conducted to review the current tax collection system and analyze
requirements for the development of Stock Tracking Module (STM) to be embedded in the
current tax collection system. Data collection was done in Kilimanjaro and Arusha the two
regions of Tanzania involving tax officers and Information Technology (IT) personnel from
TRA regional offices. This study opted pharmaceutical business as case study due to its
sensitivity to human health and the fact that, its regulatory authority’s database can be linked
with the developed system to track expired and fake drugs in the market. Data collection
process involved quantitative and qualitative methods to gather information for the
development of the system’s Stock Tracking Module (STM) such as interview, questionnaire,
role-playing and observation. The study earmarked some problems relating to Electronic Fiscal
Device Machine Management System (EFDMS) and EFD machine. The major problems
encountered by TRA are; under declaration of sales by traders, non-usage of EFD machines,
usage of fake EFD, overestimate of expenses, division of business and conducting business in
unknown areas. The main outcomes of the study: The efficiency of the EFDMS was at average,
thus, needed some improvements. Therefore, this study developed an enhanced EFD system
by introducing stock tracking capabilities to monitor traders’ actions that translate to tax
evasion in such ways as; underpricing of sales value, avoid using the EFD machine and use of
fake EFD system which consequently increase government revenues.
