The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania

Paul E. Shao; Mussa Ally Dida

doi:10.29333/jisem/7824

The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania

Paul E. Shao ¹ ² ^* , Mussa Ally Dida ³

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¹ The Nelson Mandela African Institution of Science and Technology, Arusha, TANZANIA
² Mwenge Catholic University, Moshi, TANZANIA
³ The Nelson Mandela Institution of Science and Technology, Arusha, TANZANIA
^* Corresponding Author

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Research Article

Journal of Information Systems Engineering and Management, 2020 - Volume 5 Issue 1, Article No: em0111
https://doi.org/10.29333/jisem/7824

Published Online: 06 Mar 2020

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APA 6th edition

In-text citation: (Shao & Dida, 2020)
Reference: Shao, P. E., & Dida, M. A. (2020). The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania. Journal of Information Systems Engineering and Management, 5(1), em0111. https://doi.org/10.29333/jisem/7824

Vancouver

In-text citation: (1), (2), (3), etc.
Reference: Shao PE, Dida MA. The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania. J INFORM SYSTEMS ENG. 2020;5(1):em0111. https://doi.org/10.29333/jisem/7824

AMA 10th edition

In-text citation: (1), (2), (3), etc.
Reference: Shao PE, Dida MA. The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania. J INFORM SYSTEMS ENG. 2020;5(1), em0111. https://doi.org/10.29333/jisem/7824

Chicago

In-text citation: (Shao and Dida, 2020)
Reference: Shao, Paul E., and Mussa Ally Dida. "The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania". Journal of Information Systems Engineering and Management 2020 5 no. 1 (2020): em0111. https://doi.org/10.29333/jisem/7824

Harvard

In-text citation: (Shao and Dida, 2020)
Reference: Shao, P. E., and Dida, M. A. (2020). The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania. Journal of Information Systems Engineering and Management, 5(1), em0111. https://doi.org/10.29333/jisem/7824

MLA

In-text citation: (Shao and Dida, 2020)
Reference: Shao, Paul E. et al. "The Implementation of an Enhanced EFD System with an Embedded Tax Evasion Detection Features: A Case of Tanzania". Journal of Information Systems Engineering and Management, vol. 5, no. 1, 2020, em0111. https://doi.org/10.29333/jisem/7824

ABSTRACT

This paper aims at presenting the development of an enhanced Information and Communication Technology tax collection system that in some countries is referred to as Electronic Cash Register while in Tanzania is popularly known as the Electronic Fiscal Device Machine (EFD Machines). In Tanzania, the system was nurtured in 2010 to address the issue of tax evasion and improving revenue collection. Since then it has been used by business entities to print fiscal receipt/invoice and transmit accounting information to Tanzania Revenue Authority (TRA) online system where the revenues raised from the tax were much increased. Regardless of the increase in revenues collection, still, EFD machines and its management system face several challenges concerning tax evasion which are frequently reported by government authorities. The major drawbacks observed from the current system by this study are; under-declaration of sales value, avoid EFD machine usage, the use of fake EFD system, division of business and conducting business in unknown areas without being detected by the EFD system. Therefore this paper presents the development of an improved EFD system that addresses the stipulated drawbacks with pharmaceutical business picked as a case study. The current EFD system weaknesses were fixed by embedding stock tracking and commodity cap-pricing features in the developed system. While developing the system, this study assumed evolutionary prototyping as a system development methodology to develop both EFD machine application software and EFD Management System. The major advances of the new system are its ability to detect; under-priced transactions, avoidance of EFD machine use, and use of fake EFD machines. Thus, stock tracking and cap-pricing capabilities incorporated in the developed system will enable TRA to detect tax evaders and therefore improve revenue collection across the country.

KEYWORDS

tax evasion embedded systems EFD machine stock tracking cap-price Tanzania revenue authority system development

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