According to the preliminary findings of a study conducted in Morogoro, Iringa, Njombe and Dar es Salaam, the use of the devices among VAT registered businesses poses numerous challenges that need to be addressed urgently. Otherwise, the study warns, businesses would continue to suffer and adversely affect the national economy.
According to the study, the suppliers of EFDs have a Memorandum of Understandings with Tanzania Revenue Authority (TRA), which is not binding enough for them to offer the best services to traders who report frequent breakdowns.
For example, TRA requires EFDs suppliers to be close to customers but it is just an advisory statement and not a binding condition.
“A supplier is required by regulations to repair reported faults within 24 hours but this is not enforced anywhere in the law. In upcountry, where suppliers don’t have agents, that is also impossible to implement—and does not take into the account the geographical dynamics of Tanzania,” said one of the researchers, Mr Ambakisye Mulungu.
Compared to Kenya, Malawi and Rwanda the price of a standard EFD is too high in Tanzania. In as much as TRA refunds the amount used to buy the first EFD by a VAT registered business, traders feel the pinch, because they have to dig into their capital or running expenses for the initial purchase.
Another researcher, Dr Stephen Kilemile, pointed out that for traders, the devices pose challenges such as lack of knowledge on use of the machines. “There is little knowledge on instructions and regulations. At the same time EFD language, in fact tax language, is in English.
Not all traders are fluent in English and it is high time tax language was translated into Kiswahili for better understanding,” he said. For example some traders don’t know how to deal with typing errors, as once you print a receipt, the information cannot be deleted from the device. Many traders don’t know what to do as they don’t use professional accountants.
Most of the EFDs in use upcountry are of low quality and don’t show the country of origin. “Other challenges include battery problems, network and printer failure. Many EFDs also issue substandard receipts –that simply fade away after some days,” he said. Many traders are forced to use manual receipt books at times due to failure of the EFDs. The study indicated that many business people using the devices were not conversant with tax laws, and regulations.
“This calls for the government to ensure tax laws are translated into Kiswahili and the TRA website should have a Kiswahili version,” notes the study. According to the survey most traders are not happy with the use of EFDs because of the many problems encountered almost on a daily basis.
At a meeting convened by Tanzania Chamber of Commerce, industry and Agriculture (TCCIA), Morogoro traders agreed it was their obligation to pay taxes but the tax man must make it possible for them to pay taxes smoothly without unnecessary hurdles. The study, which is being undertaken by Pamoma is financed by Business Environment Strengthening for Tanzania - Advocacy Component (BEST AC)