An assessment of the efficiency of fiscalised electronic devices in improving revenue collection in selected companies in Harare: The case of the fiscal electronic tax registers
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The study assessed the efficiency of Fiscalised Electronic Devices in improving revenue collection in selected companies in Harare using the case of the Fiscal Electronic Tax Registers. The study specifically seeks to determine whether efficient Fiscal Electronic Tax Registers increase the revenue base due to tax compliance. The basis of the study lies on the need to raise awareness on the efficiency and importance of the ETRs in improving tax revenue and tax compliance. The research combines desk and field research. Field research entailed questionnaires and interviews with key informants. Desk research entailed review of concepts, theories and experiences related to the topic. The salient findings of this research are that, efficient Fiscal Electronic Tax Registers increase the revenue base due to tax compliance. While there has been a remarkable improvement in the tax collection system, there is not much improvement on the Value Added Tax (VAT) collections since the adoption of FEDs. FETRs have only improved tax compliance in the companies that are using them. The factors that negatively affect tax compliance are resistant to change, reluctance by tax payers to embrace fiscalisation, lack of knowledge, increased administration costs and lack of capacity as well as the influx of informal traders who do not offer receipts. Fiscalisation improves internal accountability, management and control of business by recording and storing all sales without manipulation. This is evidenced by accurate caption of data and shorter audit periods by the tax collectors among others. Notwithstanding this, fiscalisation has its own challenges such as few suppliers of the devices, unrealistic deadlines, and higher penalties and also the system was not user-friendly and compatible with other devices. This is evidenced by the slow uptake of the devices due to lack of capacity and failure to get tax clearances because they had not fiscalised. Against this backdrop, the study recommends that ZIMRA carry out an impact assessment on the fiscalisation project to determine the extent of it success through monitoring and evaluation. There is need to educate the nation on the use of FETRs and the need to comply, even in rural remote areas. The government should revise the turn-over downwards to accommodate more tax payers. There is need to develop systems that are compatible and can be integrated with the computers in business premises. The informal sector should also be brought into the tax net to increase competition. The government should come up with a more user-friendly system that is easy to use linked to the internet for faster and easy access by ZIMRA.