The impact of amnesty on voluntary law compliance: a case of Tanzania Electric Supply Company Limited

This study aimed at examining the impact of amnesty on voluntary law compliance in Tanzania the case of Tanzania Electric Supply Company Limited (TANESCO). The specific objectives were; to examine whether amnesty program on debt repayment conflict with law compliance, to determine whether amnesty programs has facilitated easy collection of outstanding debts and increased revenue base and examine the challenges associated with implementation of amnesty programs at TANESCO. Secondary data sources together with interviews were used for data collection.Theories used to support this study are expected utility theory and Prospect theory. These theories relate to this study because in amnesties, decision makers are likely to make decision to delay payments of their outstanding dues with anticipation of future amnesties. It was found that amnesty program on debt repayment conflict with law compliance as they have a negative effect on customers who settle their bills on time. They feel that amnesty programs provide relief to customers who are supposed to pay interest on late payment. Also, it was found that, amnesty programs facilitate easy collection and increase revenue bases as they have a positive effect on collection of outstanding customer bills since the rate of bill settlement has shown a significant higher rate during the amnesty period. Further, it was found that TANESCO faces some challenges in implementing amnesty programs as sometimes it experience low response rate and it is expensive to implement since it involves promotion cost and forgone interest waved.