Challenges facing users of EFD machines in implementing EFD system in Tanzania: the case of selected business operators in Dar es salaam

This study aimed at studying the challenges facing users of EFD devices in implementing EFD system in Tanzania. The population of study was taxpayers in Dar es Salaam, who were using EFDs at the time of this study and those who qualify to use EFDs but were not using. A sample of 80 respondents was selected through simple random sampling and involved in a survey in which data was collected through questionnaires. In addition 2 TRA officers were interviewed so as to solicit additional information from them. Data validity and reliability were tested and data analyzed to determine the proportion of respondents choosing various responses. The study findings indicate that the main challenges to users of EFD machines are high acquisition costs of EFD machines, existence of network and power problems, frequent EFD machines breakdowns which associate with high maintenance costs, and lack of proper knowledge on the right EFD machines to be used in the business. Surprisingly challenges of daily operating EFD machine were not reported despite lack of knowledge on how to use EFDs and inadequate training offered by EFD suppliers. Furthermore, the satisfaction on the quality of EFDs receipts was found to be high and level of EFD receipts fading is very low and finally, failure of machines to capture purchases and expenses is also one of the challenges encountered by the users of EFD machines. The study recommends to distribute free EFD machines to users, adopt stand-alone machine which does not depend on networks and electricity, trainings and sensitizations program on EFDs on types, uses and how to use EFDs, improve current machines to be able to capture purchases and expenses and also the government is advised to adjust the minimum threshold to acquire EFDs. Our studies have implications to all stakeholders involved in taxation industry because it enables profound understanding of users’ needs in order to increase overall voluntary tax compliance. The theoretical and practical implications provide the benefits of the study to the government, tax authority and business community at large.