FACTORS AFFECTING ELECTRONIC FILING OF RETURNS AMONG MEDIUM

ENTERPRISES

A CASE OF MEDIUM ENTERPRISE IN ARUSHA CITY

MASTER OF SCIENCE IN FINANCE AND INVESTMENT OF THE INSTITUTE OF

ACCOUNATNCY ARUSHA.

AUGUST, 2023
FACTORS AFFECTING ELECTRONIC FILING OF RETURNS AMONG MEDIUM

ENTERPRISES

A CASE OF MEDIUM ENTERPRISE IN ARUSHA CITY

MBARUKU SALEHE

MFI-01-0016-2022

A research proposal Submitted in Partial Fulfillment of the Requirements for the

Award of the Degree of Master of science in Finance and Investment.

 Declaration

I Mbaruku Salehe, do hereby declare that this proposal is my own original work and that it has not

been presented and will not be presented to any other higher leaning institutions for similar or any

other academic award.

…………………………………………
Signature

………………………………….
Date

i
 Certification

I Hamisi Majala, the undersigned, certify that I have read and hereby recommend for acceptance

by Institute of Accountancy the proposal entitled: “Factors affecting electronic filing of returns among

medium enterprises in Arusha City” in fulfillment of the requirements for the degree of Master of

Science in Finance and Investment of the Institute of Accountancy Arusha.

……………………………………………….

(Supervisor Signature)

Mr. HAMISI MAJALA

(Supervisor’s Name)

Date ………………………………

ii
 Copyright

This proposal is copyright material protected under Copyright Act of 1999 and other international

and national enactments, in that behalf, on intellectual property. It may not be reproduced by any

means, in full or in partial, except for short extracts in fair dealing, for research or private study,

critical scholarly review or discourse without written permission of the Directorate of Postgraduate

Studies, on behalf of both the author and IAA.

© Copyright 2023

iii
 Acknowledgement

The accomplishment of this study has been supported by different people and institutions. Special

thanks to Almighty God above the earth who created the Universe and all creatures in it, I would

like to extend my indispensable gratitude to him who gave me strength, wisdom, health and

guidance during the whole time of writing this this proposal.

I would like to thank my supervisor Mr. HAMISI MAJALA for the parental heart and assistance that

helped me learn a lot of concepts and principles as far as research is concerned and not forgetting

the amazing lecturers and staff at IAA for all the assistance and knowledge they imparted in me,

am proud of you all. I would also like to extend my sincere thanks to my lovely wife, my daughters

and my family member for the precious and indescribable support they have offered to me

throughout my academic journey. Thank you very much for everything I owe you all success. Lastly,

I would like to thank all my colleagues and fellow discussion group members who have been of

great importance to me in all various aspects during my quest for knowledge. This made it easy for

me to realize my mistakes and correct them immediately hence producing quality work.

May God bless you all!

iv
 LIST OF ABBREVIATIONS

CBD Central Business District

CIT Corporate Income Tax

CLRM Classical Linear regression model

e-filing electronic filing

E-Tax Electronic Tax

EY Ernest and Young

GDP Gross domestic product

ICT Information and communication technologies

ITA Income Tax Act

KIPPRA Kenya Institute for Public Policy Research and Analysis

KRA Kenya revenue authority

NBAA National Board of Accountants and Auditors

OECD Organization for Economic Co-operation and Development

PAYE Pay as You Earn

PIN Personal Identification Number

SAP Systems Applications and Products in Data Processing

v
SDL Skilled Development Levy

SMEs Small and Medium Enterprises

TPB Theory of Planned Behavior (TPB)

TIN Tax Identification Number

TRA Tanzania Revenue Authority

TZS Tanzania Shillings

UK United Kingdom

URA Uganda Revenue Authority

US United States of America

VAT Value Added Tax

ZIMRA Zimbabwe Revenue Authority

vi
 TABLE OF CONTENTS
Declaration ....................................................................................................................................... i
Certification ..................................................................................................................................... ii
Copyright ....................................................................................................................................... iii
Acknowledgement........................................................................................................................... iv
TABLE OF CONTENTS .................................................................................................................. vii
LIST OF TABLES ............................................................................................................................. ix
LIST OF FIGURES ............................................................................................................................ x
ABSTRACT .................................................................................................................................... xi
CHAPTER ONE............................................................................................................................... 1
INTRODUCTION ......................................................................................................................... 1
1.0 Introduction .......................................................................................................................... 1
1.1 Background of the Study................................................................................................... 1
1.2 Statement of Problem........................................................................................................ 4
1.3 Objectives of the study ..................................................................................................... 6
1.4 Research Questions.......................................................................................................... 7
1.5 Significance of the study................................................................................................... 7
1.6 Scope ............................................................................................................................... 7
1.7 Limitations........................................................................................................................ 8
1.8 Organization of the Study...................................................................................................... 9
CHAPTER TWO ............................................................................................................................ 10
LITERATURE REVIEW .............................................................................................................. 10
2.0 Introduction .................................................................................................................... 10
2.1 Definition of key terms ........................................................................................................ 10
2.1.2 Technical Skills ................................................................................................................ 10
2.1.3 User interface................................................................................................................... 11
2.1.4 Cost on electronic filings of tax returns ............................................................................ 11
2.2 Theoretical Review.......................................................................................................... 12
2.3 Empirical Literature......................................................................................................... 14
2.4 Conceptual Framework ................................................................................................... 19
Summary ............................................................................................................................. 24

vii
CHAPTER THREE......................................................................................................................... 25
RESEARCH METHODOLOGY.................................................................................................... 25
3.0 Introduction .................................................................................................................... 25
3.1 Research Design............................................................................................................. 25
3.2 Target population............................................................................................................ 26
3.3 Sampling Frame .............................................................................................................. 26
3.4 Sample and Sampling Technique .................................................................................... 26
3.5 Data Collection Instruments ............................................................................................ 27
3.6 Data Collection Procedure............................................................................................... 28
3.7 Pilot Testing ................................................................................................................... 28
3.8 Data Analysis and Presentation....................................................................................... 30
REFERENCES .............................................................................................................................. 31
APPENDIX I .......................................................................................................................... 35
QUESTIONNAIRE ................................................................................................................. 35
Appendix 2 ................................................................................................................................ 39
Work plan.................................................................................................................................. 39
Estimated Research Budget .................................................................................................... 40

viii
 LIST OF TABLES
Table 1 Target population ...............................................................................................................26

Table 2 Table 2 Work Plan .......................................................................................................... 39

Table 3 estimated Research Budget ............................................................................................ 40

ix
 LIST OF FIGURES

Figure 1 Conceptual Framework .................................................................................................. 20

x
 ABSTRACT

Governments worldwide are increasingly adopting electronic tax filing systems to enhance tax

compliance, efficiency, and public service delivery. This research will focus on the factors

influencing the adoption of electronic tax filing

systems among medium enterprises in Arusha City, Tanzania. By investigating the extent to which

technical skills, user interface design, and associated costs will affect medium enterprises to adopt

electronic tax filing systems. The study will employ a descriptive research design with a cross-

sectional approach to systematically examine the phenomenon. The target population will comprise

medium enterprises meeting the criteria of having 50 to 99 employees and a capital investment

between TZS 200 million and TZS 800 million. Cluster sampling and probabilistic-random sampling

methods will be used to select a representative sample of over 30% of the medium enterprises in

Arusha City. Data will be collected through structured questionnaires, observation, and interviews.

The study will employ pilot testing to validate and ensure the reliability of the research instrument.

Data analysis will include both quantitative and qualitative methods. The study will contribute to a

deeper understanding of the barriers and facilitators of e-filing in a specific context and also will

sheds light on the implications of these factors on tax compliance and revenue collection, thereby

informing policymakers and practitioners. Ultimately, this study not only expands the body of

knowledge on electronic tax filing adoption but also offers recommendations to enhance the

implementation of such systems for the benefit of both businesses and the government.

xi
 CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter including background of the study, statement of problem, objective of the study,

(general objective and specific objectives of the study), research questions, significance of the

study, scope of the study and limitation of the study

1.1 Background of the Study

Tax revenue is a vital pillar in support of economic growth in developing countries. Taxation is the

main source of central government revenue for state-building, elimination of long-term dependence

on foreign assistance, increasing the fiscal effects of trade liberalization, and providing much-

needed public goods and services ((Fjeldstad, Mascagni et al., & OECD, 2011; Fjeldstad, 2013).

Factors that affecting collection of tax revenue through electronic tax filing systems including lacking

of technical skills, user interface and direct costs associated with e-filling (Kagendo, 2019).

Governments around the world are increasing the use of information and communication

technologies to improve the delivery of public services and the dissemination of public

administration information to the public (Kamarulzaman, 2019 ). One prominent type of e-

government is the introduction of the e-filing system for income tax. Through this system, taxpayers

are able to submit their tax returns electronically to the tax authorities. However, this system is slow

in gaining acceptance by taxpayers.

1
For example, in the US, which introduced e-filing in 1986, it is reported that only 52% of its taxpayers

used e-filing in 2007 (The Internal Revenue Service, 2007).

Malaysia also introduced tax e-filing in 2009, the fourth year after e-filing was implemented, only

1.25 million taxpayers were reported to have filed their tax return through e-filing (Bernama, 2009),

It was reported that Malaysia only has slightly more than 1.3 million individual taxpayers out of a

population of more than 33.5 million, representing a mere 4.0 per cent of the whole population

(Chung, 2023). Since its introduction in 2014, Indonesia’s e-Filing system has found wide adoption,

with the number of users exceeding expectations.

In Africa, On 28 June, 2015 Zimbabwe Revenue Authority (ZIMRA) launched an e-services solution

which was developed in conjunction with Microsoft and SAP. The e- service platform gives ZIMRA

an opportunity to interact with its clients and at the same time allowing them to do business with the

Authority in the comfort of their homes or offices. It is an important step towards the creation of a

virtual tax office (Obert, 2018).

In East Africa region, in Uganda the Uganda Revenue Authority (URA) in 2005 developed an online

tax system in order to enhance efficiency in the tax administration process and reduce the

taxpayer’s expenses in tax compliance (Muwonge, 2011). In Kenya the Kenya Revenue Authority

(KRA), the body responsible for collecting revenue on behalf of the Government of Kenya in October

2013 launched a new online tax filing system to enhance tax collection and limit tax evasions so as

to effectively execute its mandate (Weru, 2013). In Tanzania, The Government of Tanzania through

the Tanzania Revenue Authority decided to phase out manual submission of Value Added Tax

(VAT) returns to e-filing since the year 2010.

2
For implementation purposes, a person who is permitted to file tax returns electronically is provided

with electronic Filing Identification Number (e-FIN) (Tax Administration (General) Regulations,

2016).

On 29th June 2017 the parliament of Tanzania published the Tax Administration (Electronic

Revenue Collection System) Regulation 2017 purposely to collect revenue electronically. The

Tanzania Revenue Authority (TRA) introduced an electronic filing (e-filing) system to improve tax

compliance and increase efficiency in tax administration. Prior to deploying the e-filing system, only

the monthly value-added tax returns were filed electronically and withholding tax certificates were

generated electronically. The new e-filing system allows the following additional tax returns to be

filed electronically (EY, 2020). Annual corporate income tax (CIT) returns, Provisional income tax

returns, Monthly pay-as-you-earn (PAYE) returns, Monthly skills and development levy (SDL)

returns.

The main objective of this study will be to establish the factors affecting the electronic filing of returns

among medium enterprises in Arusha City, according to (Kagendo, 2019) those factors include user

interface, technical skills and direct cost associates with introduction of e-filling system.

On the problem of user interface, I will check the effectiveness of user guidelines, obstacles facing

the users, easiest on using the system and the effectiveness of the system in such a way that it can

detect errors as one makes submissions to avoid making wrong returns.

3
On Technical skills I will study on the technical skills of the appointed declarant and the audit firm

on filling electronic tax returns and on Cost of online filling returns I will study how effective is the

system in relation to cost of filling and penalty associates to late submission due to system

bureaucratic and slowness system.

The government of Tanzania through Tanzania Revenue Authority has provided user guideline

version 1.0 on August 2020, which provides step by step on how to perform and execute various

task through the developed system of electronic filing of tax returns (E-filing). Through the system

Taxpayer will have direct interact with TRA while at their house or office, the system has reduced

queues at TRA during due dates-filling result in fewer errors and creates simple and quicker

processing of documents and also taxpayer can save their records in their email boxes or print hard

copies for future reference.

The problem of electronic filing system is still persisted because the new e-filling system associated

with the problem of user interface where user of the system does not have enough knowledge about

the system, also technically skills and direct cost problem such as software, equipment, raw

materials, and labor are still persisted, hence there is need to do research (study) on the factors

affecting the electronic filing of returns among Small and Medium Enterprises in Arusha City.

1.2 Statement of Problem

It has been noted that, the poor nature and untimely payment of taxes is a result of lack of

accessibility to information technology which is supposed to ease the e-registration process, e- filing

and tax returns as well as tax compliance (Hossaini, 2022).

4
For example, currently it is said that, some taxpayers do not have tax identification number which

should have made them have easy access to e-filing, thereby improving self-tax assessment may

sound as a good measure by the government through the authority to improve the level of tax

compliance through electronic filing of tax returns (Hossaini, 2022). Issues have been on the

knowledge that taxpayers have on the self-tax assessment system and competences

(Madina,2019).

Much more complications are in the electronic tax filing or e-filing process where tax documents or

tax returns are submitted through the internet, usually without the need to submit any paper return

(Madina, 2019). The e-filing system encompasses the use of internet technology, the Worldwide

Web and Software for a wide range of tax administration and compliance purposes. The question

arises as to if small and medium enterprises in Arusha City are able to cope with that level of

technology for on filling electronic tax returns as per administrative requirements.

Although the exercise has been done in many countries and its application has been for many years

where some countries have registered up to 90% of tax collection and enabling their governments

to carry out their projects without deficits. (Abdul, 2016). But for the case of Smalls and Medium

Enterprises in Arusha City the study has not been done probably due to lack of previous research

studies on electronic filling of tax returns a case study of Arusha, Time constraints and costs to

collect data.

5
I will overcome the challenge of lacking of previous research studies on electronic filling of tax

returns by collecting data from primary and secondary sources, I will overcome the challenge of

time constraint by starting doing the research early and finally I will overcome the challenge of costs

related to transport, internet and documentation by using my own vehicle to collect data and by

using office and university facility for internet and documentation. Failure to conduct the proper

study regarding electronic filling of tax returns SMEs will suffer penalty and interest related to failure

of filling returns on time and government will lose tax revenue due to non-compliance.

Although Tanzania Revenue Authority stipulated the advantages of electronic filling of returns. But

the study will focus on finding out the factors that affect the filing of taxes through the online

electronic filing of returns among Small and Medium Enterprises in Arusha City.

1.3 Objectives of the study

1.3.1 General Objective

The main objective of this study will be to establish the factors affecting the electronic filing of returns

among medium enterprises in Arusha City.

1.3.2 Specific Objectives

i. To assess effect of lack of technical skills on electronic filing of returns among medium

enterprises in Arusha City.

ii. To assess the effect of user interface on electronic filing of returns among medium

enterprises in Arusha City.

iii. To assess the effect of cost on electronic filing of returns among medium enterprises in

Arusha City.

6
1.4 Research Questions

i. How do lack of technical skills affect electronic filing of returns among medium enterprises

in Arusha City?

ii. How does user interface affect electronic filing of returns among medium enterprises in

Arusha City?

iii. How does cost affects electronic filling of returns among medium enterprises in Arusha

City?

1.5 Significance of the study

The significance of this study will help the Government policymakers to get the guideline on how

they can maximize on tax administration. This will be achieved through the study.

The findings of the study and recommendations improved on the online tax platform including

software to make them more reliable or even train users.

On the scholarly side, the study will contribute more empirical literature and assist future

researchers interested in the same field of study to have enough literature because there are few

researches on the said topic.

Medium enterprises also will benefit from this research from recommendation done, because it will

help them to acquire technical skills on electronic filling of returns, overcome user interface on using

electronic filling of returns and also reduce costs associate with electronic filling of returns.

1.6 Scope

This study will focus on the effect of technical skills, user interface and cost of filing electronic tax

returns among medium enterprises in Arusha City.

7
The researcher mainly will concentrate on medium enterprises located in Arusha city. The target

population in this study will be medium enterprise with number of employees 50 to 99 and capital

investment above TZS 200 to 800 million. The project will be carried out between November 2022

to May 2023.

1.7 Limitations

Limitations are matters and occurrences that arise in a study which are out of the researcher's

control. They limit the extensity to which a study can go, and sometimes affect the end result and

conclusions that can be drawn.

Every study, no matter how well it is conducted and constructed, has limitations. This is one of the

reasons why we do not use the words "prove" and "disprove" with respect to research findings.

It is always possible that future research may cast doubt on the validity of any hypothesis or

conclusion from a study. Your study might have access to only certain people in an organization,

certain documents, and certain data. These are limitations. Subsequent studies may overcome

these limitations (Goes,2013). In this study I expect to have the following limitations and how I can

overcome them

i. Lack of previous research studies on electronic filling of tax returns, I will overcome

this challenge by collecting data from journals, books, Articles, websites of the

Revenue Authority and other sources.

ii. Time constraints, time also will be barrier to conduct this research because it will need

time to assess technical skill, user interface and cost of electronic filling of returns, but

I will overcome this challenge by starting doing the research early.

8
 iii. Transport costs, internet and documentation cost also will be challenges on

conducting the research, but I will save the said challenge by using my own vehicle to

collect data, for internet and documentation I will use office and university facility

(network).

1.8 Organization of the Study

The study is organized in three chapters. Chapter one provides the clear background to the study,

the statement of the problem, research objectives and hypotheses, as well as the scope,

significance and the limitation of the study.

In the second chapter, researcher presents both the empirical as well as the theoretical literature

reviews in relation to the study and clearly showing the knowledge gap observed, whereas, in the

third chapter, researcher presented the methodologies to be adopted in carrying out the study, this

includes the data source and sample size, research design and approach, variables and their

measurements, data analysis methods, model specifications as well as the estimation techniques.

9
 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter will review both empirical and theoretical literature on the study about factors affecting

electronic tax filing. The literature will be obtained from journals, articles, books, and magazine that

has an interest in a similar area of study.

2.1 Definition of key terms

2.1.1 Electronic tax filing

Electronic tax filing, commonly referred to as e-filing, is the process of submitting tax returns and

related documents to tax authorities using digital technology and online platforms. Instead of the

traditional paper-based approach, where individuals and businesses physically prepare and mail

their tax forms, e-filing allows taxpayers to complete, submit, and track their tax obligations

electronically through secure and user-friendly online systems. (Michael A, 2010).

2.1.2 Technical Skills

Technical skills in the context of electronic filing of returns refer to the proficiency and knowledge

that individuals or entities need to effectively navigate and use digital platforms and technology for

submitting tax-related information electronically.

10
These skills are crucial for successfully interacting with electronic tax filing systems and ensuring

accurate and compliant submissions including Computer Literacy, Internet Navigation, Software

Proficiency, Data Entry and Accuracy, Troubleshooting, Security Awareness, File Management, Use

of Supporting Tools, Updating Software, Mobile Device Usage and User Support. (IRS.gov. 2021).

2.1.3 User interface

The user interface (UI) in the context of electronic filing of returns refers to the visual and interactive

design through which individuals or entities interact with the digital platform or software used to

submit their tax-related information electronically. A well-designed user interface plays a critical role

in ensuring that users can easily and efficiently navigate the electronic filing process. The user

interface encompasses various elements that contribute to the overall user experience, including

Visual Design, Navigation, Menu and Iconography, Input Forms, Error Handling, Progress

Indicators, Help and Support, Confirmation and Submission, Security and Privacy, Responsive

Design, User Feedback and Language and Localization. (Tax-Aide, 2021)

2.1.4 Cost on electronic filings of tax returns

Cost considerations in the context of electronic filing of tax returns refer to the financial implications

associated with the adoption, implementation, and maintenance of digital platforms or software that

enable individuals or businesses to submit their tax information electronically.

These costs can encompass various aspects and factors: Initial Setup Costs, Software

Development or Procurement, Training, Data Migration, User Support, Maintenance and Upgrades,

Security Measures, Integration with Existing Systems, Compliance Costs, Hardware and

Infrastructure, Operational Costs and Return on Investment (ROI) Analysis.

11
2.2 Theoretical Review

A theory is a rational type of abstract thinking about a phenomenon, or the results of such thinking.

The process of contemplative and rational thinking is often associated with such processes as

observational study or research. Theories may be scientific, belong to a non-scientific discipline, or

no discipline at all. Depending on the context, a theory's assertions might, for example, include

generalized explanations of how nature works. The word has its roots in ancient Greek, but in

modern use it has taken on several related meanings. (Wikipedia, 2011).

The study will focus on the expectation theory, adoption theory, and economic regulation theory.

The study will derive basically from the technology acceptance model of new technology, the theory

of reasoned action and the economic theory. The discussion of the theories will show how each

theory applies to the study.

2.2.1 Technology Acceptance Model

The theory of technology acceptance was postulated by (Venkatesh, 2017). The theory opinion is

that for a particular technology to be accepted it has to be useful and also easy to use. This theory,

therefore, implies that for a technology to be useful, it has to be able to either simplify the task it

performs and serves the intended purpose. On the ease of use, the technology to be adopted must

be user-friendly (Granic, 2015).

From this theory I will focus to see if Tax Electronic filing system in Tanzania it has been useful and

easy to use, and if it simplifies the tasks and it’s performing and serves the intended purposes of

Taxpayers to interact with TRA while at their houses or offices.

12
Elimination or reduction of queues at TRA offices during due dates, if E-filing resulting in fewer

errors and creates simple and quicker processing of documents and If Taxpayers can save their

records in their e-mail boxes or print hard copies for future reference.

2.2.2 Theory of Reasoned Action

The theory of reasoned action was pioneered by (Fishbein, 1975). The theory postulates that

individual behavior is guided by the individual's attitudes towards the behavior and the conformity

to the general norm. On individual attitude, the theory holds that a person's action or omission to

act in a particular is guided by his/her attitude on the general feeling of whether it is right or wrong.

On the conformity to the norm, the theory opined that a person may act in a certain way based on

the perception of how others would say about your actions (Riley, 2017).

The theory will help to see individual behavior toward electronic submission of monthly PAYE and

SDL returns which was effectively start for the period of August 2020 which are due on or before 7

September every month, VAT returns which is due on or before 20 every Month, and electronic

submission of returns of income of an entity which is due on or before 30 June every year effectively

starting with unsubmitted returns for the year of income 2019. And the behavior toward how people

paying tax after submitting a tax return where a tax assessment automatically generated in the e-

filing system with debit number to be used for tax payment.

13
2.2.3 Economic Theory

Economic theories generally call for increased audit and penalties as the solution to compliance.

However, the policy prescription of psychological theories leads to emphasize on changing

individuals’ attitude towards the tax system by increasing its perceived fairness and making it easy

to comply with the tax low through such measures as superior website information, increased

telephone assistance and appropriate information technology (Trivediet, 2005)

The study of this theory will help Tanzania Revenue Authority to emphasize on changing individual’s

attitude toward the tax system and increase its perceived fairness and making it easy to comply

with the tax law through such measure as friendship, seminars, superior website information,

increase telephone assistance ( Toll free mobile number 0800 750 075/0800 780 078 and email

group.efillingsupport@tra.go.tz, service@tra.go.tz and huduma@tra.go.tz ) and appropriate

information technology instead of increase audit and penalties which in turn increase tax evade.

2.3 Empirical Literature

Scholars across the world have made a modest attempt to explore the Costs, technical skills, user

interface, human behavior and the e-filing adoption process in the context of different countries.

Some of the notable studies are discussed below.

Vddramootoo, (2018) examined the model of e-filing continuance usage. The model has its

theoretical basis in the expectancy confirmation theory and the DeLone and McLean's IS Success

model. The model is extended to include two additional constructs relevant to e-filing continuance

usage: perceived risks and habit.

14
The model is tested using data collected from a sample of 645 e-filing users in Mauritius. It made a

theoretical distinction between initial adoption and continuance usage behavior. Accordingly,

following a review of existing literature, it was concluded that the majority of research on e-filing has

adopted constructs from the adoption literature to study continuance usage behavior.

Chen j, (2015) examined citizens’ propensity to use e-governmental website services through the

lens of the IS Success Model in general, and in the context of the Philippine online tax filing system.

As long as its importance towards perceptions of adoption and continued use online tax filing

system. Trust in government and trust in technology must be established for citizens to trust e-

government, and in turn, trust in e-government must be established for citizens to have favorable

perceptions towards the using of electronic filing system.

Triki, (2016) developed a research framework by integrating the unified theory of acceptance and

use of technology's model with multi-dimensional trust in order to investigate the antecedents of

behavioral expectation toward the adoption of electronic tax filing.

It provides valuable practical implications for academia and policy makers to foster the adoption of

e-filing. However, recommended that for the online system of tax to be successful it needs to be

easy to use but also hard for hackers to interfere with programs in place by installing great fire-walls

for security purposes.

Alfred Kimea, (2019) examined on analysis of factors that influence taxpayers’ intention to use

electronic tax filing system.

15
The paper employs Technology Acceptance Model (TAM) framework and their found bias, then

their switch to endogenous switching regression model. Results of endogenous switching model

show that risk, social influence and performance expectancy have significant effects on intention to

use e-filing. Further, they found that these factors affect users and non-user’s intentions differently,

calling for differentiated strategies in influencing e-filing use intention. Lastly, they recommended

both administrative and technical issues to be considered for enhanced intention to use and

adoption of e-filing system.

Sichone, (2017) examined on assessing the facilitating conditions, perceived benefits and perceived

risk on intention to adopt e-filing. A survey was conducted covering Coast, Dar es Salaam and

Mwanza regions to assess the influence of such conditions, by using factor analysis in order to

extract common factors. The results indicate that perceived risk was negatively related to intention

to adopt e- filing as proposed by the study, but it was statistically insignificant. They are

recommended that tax authorities should put more emphasis on enhancing taxpayers’ perceived

benefits by providing e-filing education and creating awareness to improve taxpayers’ intention to

adopt e-filing.

2.3.1 Critique of Literature Review

The literature review above has noted that the key major factors affecting online tax filing are

technical, cost and user-face factors. Among the scholars supporting that perception influenced tax

filing noted that trust and credibility of a system influenced tax filing that converges with the

technology acceptance model that technology is as good as the user, an installed system that is

easy to use builds credibility and therefore trust among the users of the system.

16
The perceived usefulness and ease of use of a system also affected tax filing. On the other hand,

the people who were not willing to do online tax filing posited that they felt exposed by giving

information to their competitors.

The reviewed literature noted that technical skills also form the back bone of an effective online tax

system, medium enterprises with expertise in spreadsheets and accounting skills as well as online

techno savvy have an upper hand in adopting online tax system.

(Querol Julián, 2019) concurs with these thoughts where they posited that users of a technology

system must have the necessary skills to use it to perform the desired functions. They noted that

necessary skills in online tax filing are information technology literacy, knowledge of the taxation

system and tax laws as well as having an existing support system to support and enhance these

skills and knowledge.

Cost of filing taxes that involves purchasing of ICT equipment including computer hardware and

software is also considered by some scholars as a challenge for a small and medium enterprise to

invest in online filing of taxes. Such other costs related to filing of taxes involves engaging tax

experts to do paperwork on monthly or annual bases depending on the number of taxes that one is

subject to, the more the tax obligations the higher the costs.

Where the tax payers feel overburdened by a tax system chance of evasion or tax frauds are also

high resulting in non-compliance to taxes. Findings by Castells, 2010 on economic network theory

are concurrence with empirical literature posited by (Coolidge ,2010) that medium businesses have

a burden of ensuring that they comply with tax legislation.

17
A company has to ensure that proper compilation of input and output taxes are done on monthly

basis especially for the purposes of filing value added tax. Therefore, these firms have to ensure

that they hire competent personnel on matters relating to tax in order to remain compliant. The cost

in terms of planning and administration involves cost of paying for huge penalties and fines as well

as making necessary payments when due to remain compliant.

2.3.2 Research Gap

Kagendo, (2019) on her study concerned factors affecting electronic filing of returns among small

and medium enterprise in Mombasa Centre Business District she considered only two electronic

tax returns which are Vat returns and Income tax returns, but the study did not consider other returns

such as Provisional income tax returns, monthly pay-as-you-earn (PAYE) returns and monthly skills

and development levy (SDL) returns

Atambo, (2018) on their study effects of the electronic-tax system on the revenue collection

efficiency of Tanzania Revenue Authority noted that there has been improved compliance as a

result of the electronic tax system. However, the study did not consider factors influencing electronic

filing.

Kalyan, (2017) evaluates the e-filing trends in India and also discusses the factors affecting the

adoption of e-filing system and level of satisfaction among the e-filing system users in India.

18
They used Theory of Reasoned Action (TRA) (Ajzen, 1975), Theory of Planned Behavior (TPB)

(Ajzen, 1985) and Technology Acceptance Model (TAM) (Davis, 1989) to explain the different

factors affecting the human behavior and also with special reference to the factors influencing

adoption of the e-filing system by considered Exhibit the trend or growth of e-filing of income tax

return in India, Assess the level of satisfaction among the e-filing system users; and Determine the

factors affecting the level of satisfaction of the e-filing system users but they did not considered

technical skills of the user, user interface and costs relating to e-filing system.

Chen J. C, (2015) on factors affecting online tax filing–an application of the IS Success Model and

trust theory. The study was however carried out in a developed country, therefore, the need to carry

one in a developing country where the micro and macro-environment is different.

(Mpinganjira,2015) on perceived ease of use examining its Influence on personal use of the tax e-

filing system noted that some small businesses in Vietnam find the web-based system complicated

in filing tax and therefore seek for tax-consultants to help them. This study was however done in a

country with a different tax regulatory framework, macro as well as the microenvironment.

2.4 Conceptual Framework

The diagram below shows the factors affecting electronic filing of returns among medium

enterprises in Arusha City. The independent variables are technical skills, user interface and cost

of online fillings and the dependent variable is compliance to use of the online tax filing system.

19
Independent Variables Dependent Variable

User interface

• Guidelines

• Ease of use

Online Report Filling

Technical Skills
• Value Added Tax (VAT) Returns

• Appointed Declarant and • Annual Personal and corporate income tax

auditor (CIT) returns

• Internet • Provisional income tax returns

• Tax law • Monthly pay-as-you-earn (PAYE) returns

• Monthly skills and development levy (SDL)

returns
Cost of online Filling

• Training Costs

• Costs of Computer

hardware and software

• Time consumed

Figure 1 Conceptual Framework

20
2.4.1 User Interface

The user interface is guided by the technology adoption model which postulates that for a particular

technology to be adopted by a certain group of people they have to perceive the technology as

useful in solving their daily problems. On the other hand, the technology being adopted has to be

easy to use. Therefore, user interface must guarantee security of information, make filing of taxes

easier and be reliable (Chawner, 2021).

Although there is a user guideline version 1.0 issue by Tanzania Revenue Authority on August 2020

which provides step by step on how to perform and execute various task through the developed

system of electronic filing of tax returns (E-filing). I will check if the use guidelines help the SMEs to

file electronics returns as required by law.

On ease to use the system I will check obstacles facing the intended user of the system. The system

needs to be easy to use among the intended users. The tax-payers need to perceive the system

friendly in filing of electronic taxes returns. In order to make it user-friendly the server system should

be active with promptly internet together with telephone contact for the call center and online

emailing system for support 24hrs, unless the system will not be user friendly. And also, I will check

if the system is effective in such a way that it can detect errors as one makes submissions to avoid

making wrong returns.

2.4.2 Technical skills

Users of a technology system must have the necessary skills to use it to perform the desired

functions. This section focuses on key technical skills and knowledge needed to take advantage of

the online systems.

21
These required skills and knowledge are information technology literacy, knowledge of the taxation

system and tax laws as well as having an existing support system to support and enhance these

skills and knowledge (Julian, 2019).

As the system allow the entity to appoint declarant and Audit firm. An appointed declarant will be

responsible to submit tax returns in the e-filing system on behalf of the entity. A declarant must be

an individual who is registered as an e-filer in the e-filing system. The declarant can be a manager,

an accountant, tax consultant, or a director. A declarant must have a valid TIN in order to register

as an e-filer. An entity must also appoint an audit firm to certify the return of income of the entity

prior to submission to the TRA. The appointed audit firm must have a valid TIN and be registered

as an e-filer and as an audit firm in the TRA database. The audit firm must also be registered with

the National Board of Accountants and Auditors (NBAA) of Tanzania in the category of Certified

Public Accountants in Public Practices (EY Global Tax Alert, 2020). Here I will study on the technical

skills of the appointed declarant and the audit firm on filling electronic tax returns.

On the other hand, making submissions of taxes online involves internet, lack of familiarity with the

tax websites to submit return for persons who lacks computer skills especially emailing and internet

skills may find it difficult to file return resulting to noncompliance. Tax compliance whether online

requires adherence to tax legislation such as deadlines and when payments of taxes need to be

done to avoid penalties or fines.

22
2.4.3 Cost of Online Filing

Past literature has noted that cost associated with the adoption of electronic filing system include;

training cost on how to use Microsoft office suite including internet explorer or Mozilla, internet cost

that included monthly internet bundles or subscription fee to an internet provider such as Vodacom,

Tigo or airtel, and computer equipment costs such as laptops and desktops (Akram, 2019).

There are direct costs associated with introduction of electronic filing system include software,

equipment, raw materials, and labor. Therefore, these firms have to ensure that they hire competent

personnel and modern software and equipment on matters relating to tax in order to remain

compliant. The cost in terms of planning and administration involves cost of paying for huge

penalties and fines as well as making necessary payments when due to remain compliant. A system

with very complex tax filing results into high chances of defaults, frauds as well as avoidance. The

cost of filing taxes varies with the number of taxes that one is subject to including Value Added Tax

(VAT) Returns, Annual corporate income tax (CIT) returns, Provisional income tax returns, Monthly

pay-as-you-earn (PAYE) returns and Monthly skills and development levy (SDL) returns. On the

other hand, the complexities of filing taxes also affect the cost of filing taxes with bureaucratic and

slow system resulting into high costs due to the many manly hours spent on filing taxes.

Training costs include the actual materials created or utilized for training and time spent in each

training module or conference. This is calculated into the total because every moment an employee

spends in training is time away from their job when staff are training for electronic filing system

means other job are forgotten.

23
On the other hand, the system of electronic filing of returns saves costs associated with time and

transport because Taxpayers can interact with TRA while at their houses or offices, costs associated

with penalty because it eliminates on or reduction of queues at TRA offices during due dates, cost

of stationaries and documentation because taxpayer through the system of E-filing will result in

fewer errors and creates simple and quicker processing of documents and taxpayers can save their

records in their e-mail boxes for future reference.

Summary

The literature found that factors affecting electronic tax filing are lacking of technical skills, user

interface and direct costs associated with introduction of electronic filing system include software,

equipment, raw materials, and labor training costs which include the actual materials created or

utilized for training and time spent in each training module or conference. To avoid inefficiencies

and corruption in developing countries, the tax collection process should be smooth, prompt,

effective and transparent. Understanding of the different factors which affect the e-filing system

adoption can be of great significance in developing proper strategies for effective implementation

of the e-government services (Fu et al., 2006). Thus, the study will make a modest attempt to shed

some light on the level of easiest on using the system, trust medium enterprise have to the

government and the technology and adoption and continuance usage behavior of the taxpayers.

24
 CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

This chapter of the study consist of research design for the study, targeted population for the study,

sampling size and sampling techniques, data collection instruments, data collection procedures,

and data analysis techniques.

3.1 Research Design

Descriptive methodology will be placed for this study. Descriptive research design is a type of

research design that aims to obtain information to systematically describe a phenomenon, situation,

or population. More specifically, it helps answer the what, when, where, and how questions

regarding the research problem, rather than the why (Voxco, 2021). I will use descriptive method

of research based on cross-sectional studies. A cross-sectional study is a type of observational

study that involves gathering information on a variety of variables at the individual level at a given

point in time (Voxco, 2021). This approach was desired due to its ability to collect data with different

socio-economic characteristic at a particular time from different individuals and ability to compare

such findings. In this case, the study sought to establish the compliance of the SMEs in Arusha City

on online-tax filing. (Stubben, 2018) noted that a cross-sectional research design enables the

researcher to collect characteristics and opinion of respondents without interfering with results.

25
3.2 Target population

The study will focus on medium enterprises in Arusha City. The Small and Medium Enterprise

Development Policy (2003) of the Government of Tanzania defines SMEs by considering the

number of employees and the capital investment in asset. For the Medium enterprise should have

Number of employees 50 to 99 and Capital investment (TZS) Above 200 to 800 million.

Table 1 Target population

DETAILS BUSINESS TYPE MINMUM MAXMUM

Number of Employees Medium Enterprises 50 Employees 90 Employees

Capital Invested Medium Enterprises TZS 200 million TZS 800 million

Source: http://www.esrftz.org/

3.3 Sampling Frame

The study will be carried out in Arusha City. The researcher mainly will concentrate on medium

enterprises. The target population in this study will be medium enterprise with number of employees

50 to 99 and capital investment above 200 to 800 million around 250 Medium Enterprise in Arusha.

3.4 Sample and Sampling Technique

A sample is a portion or subset of the research population selected to participate in a study

representing the research population (Cooper & Schindler,2013). Sampling is a process of selecting

a number of individuals for a study in a way that the selected individuals represent the larger group

from which they were selected (Oliver, 2010).

26
The study will use cluster sampling and probabilistic-random sampling procedure. The clusters in

Arusha constituency will include medium enterprise. The study will opt to cover more than 30% of

the medium enterprise in Arusha as a sample size. Mugenda and Mugenda (2003) confirmed that

a sample size of at least 30% is enough and representative of a whole population in a study. Also,

I will determine the degree of accuracy by establish the confidence interval and confidence level.

According to (Mukherjee, 2019) The confidence interval, also called the margin of error, is a plus or

minus figure. It is the range within which the likelihood of a response occurs. The most commonly

used confidence interval is +/- 5. Thus, a 95% confidence level means you can be 95% certain. The

confidence level tells you how sure you want to be and is expressed as a percentage. It represents

how often the responses from your selected sample reflect the responses of the total population.

The lower the confidence level, the less certain you will be.

3.5 Data Collection Instruments

Data for the study will be collected through the use of a questionnaire. Data-collection instruments”

means tests, questionnaires, inventories, interview schedules or guides, rating scales, and survey

plans or any other forms which are used to collect information on substantially identical items from

10 or more respondents (LLI,2021). I planned to use Observation, Interviews and Questionnaires.

On questionnaires there are three types of questionnaires namely; structured, unstructured and

semi-structured questionnaires. I planned to use a structured questionnaire with semi-structured

questions. The instruments will be designed in such a way that it collected perceptions and opinions

in line with the research questions in the study. The use of questionnaire (Appendix I) is best suited

due to its ability to gather facts from respondents without alterations of their first-hand opinions on

different areas of studies.

27
3.6 Data Collection Procedure

I planned to deliver questionnaires online through email and in paper-and-pen formats through drop

and pick methods among the respondents. I Planned to give three weeks to the respondents to

filled questionnaires. Questionnaires are relatively easy and inexpensive to administer for the

simplest of designs ( (Ader, 2008)). On observation I planned to observe technical skills, user

interface and cost of electronic filling of tax returns and I plan to have interviews question which

related to factors affecting filling of electronic tax returns among medium enterprise.

3.7 Pilot Testing

A pilot study, also called a 'feasibility' study, is a small-scale preliminary study conducted before

any large-scale quantitative research in order to evaluate the potential for a future, full-scale project.

Pilot studies are a fundamental stage of the research process. They can help identify design issues

and evaluate feasibility, practicality, resources, time, and cost of a study before the main research

is conducted (Simkus, 2022).

Both validity and reliability tests will be conducted on the research instrument to test their
effectiveness and reliability. Reliability and validity are ways of demonstrating and communicating
the rigor of research processes and the trustworthiness of research findings. If research is to be
helpful, it should avoid misleading those who use it. This trustworthiness depends on a number of
research features: the initial research question, how data are collected including when and from
whom, how they are analyzed, and what conclusions are drawn (Paula, Priest 2006). Each variable
will be operationalized and included in a survey instrument.

The survey instrument will pre-tested within 10% of the medium enterprise with number of
employees 50 to 99 and capital invested above 200 to 800 million.

28
3.7.1 Validity

Validity addresses the problem of whether a measure measures what it is supposed to measure

(Zimund, 2000). According to (Thietart, 2001), the main concerns with the validity are whether the

measured data is relevant and precise, and the second is the extent to which we can generalize

from those results. This proposal will bring up the question of whether the interviewer will be

measured in the right way and the interviewed questions will be proper and go well with the

research’s objective and purpose. Therefore, 10 questionnaires will be given to respondents to help

to know whether the key aspect of the desired information has been provided by the respondents.

The supervisor and research experts for the research project will also be looked at the research

tools to ascertain if the instrument will be able to capture questions appropriately for the study.

3.7.2 Reliability

Reliability refers to how consistently a method measures something. If the same result can be
consistently achieved by using the same methods under the same circumstances, the measurement
is considered reliable (Middleton, 2022). (Silverman ,1993) outlined several ways that reliability can
be achieved in qualitative research: pre-testing interview protocols and questions; using fixed-
choice responses; and systematically collecting, transcribing and reporting field notes and
transcripts for others to review as necessary. In the study, reliability will be achieved by repeating
some research questions used by other research on the same study, also reliability will be achieved
by observing technical skills, user interface and costs associated with e-filing system.

Reliability also increases by including many similar items on a measure, by testing a diverse sample
of individuals and by using uniform testing procedures. The study will used Cronbach (α= 0.7) to
test on the reliability.

29
3.8 Data Analysis and Presentation

Data collection for the study will be both quantitative and qualitative in nature. For the quantitative

data will come from closed questions, it will be analyzed through descriptive analysis technique

where percentages, frequency, the mean and standard deviation will test central tendency levels

(Holcomb, 2016). Open-end questions representing qualitative data will be analyzed through

content analysis on the thematic–opinions of the respondents from their deep understanding of

concepts (Kim, 2017).

Classical linear regression is used to quantify a statistical relationship between a dependent variable

and set of independent variables on the basis of available observation or data. Classical Linear

regression model (CLRM) may take a form of simple linear regression or multiple linear regression

models (Manamba,2020). Simple linear regression model and correlation analysis will be used in

this study.

The model of simple linear regression mode will be on the following form:

Y= B0 + B1 X 1 + є

Where: Y = Dependent Variable (Compliance on online returns filing)

B0 = Intersect/Constant of the population

B1 = The Slope/Parameter (coefficient for independent Variables)

X1 = (Independent Variables)

є = Disturbance term (Error term)

30
 REFERENCES

(Fjeldstad, 2., Mascagni et al., 2., & OECD, 2. (2011). Taxation.

Abdul, A. &. (2016). Electronic Tax Filing Adoption and its Impact on Tax. World Applied Sciences Journal.

Ader. (2008). Advising on research methods: A consultant's companion.

Akram, M. S. (2019). Exploring the interrelationships between technological predictors and behavioral

mediators in online tax filing: The moderating role of perceived risk. Government Information

Quaterly.

Alfred Kimea, C. C. (2019). Analysis of Taxpayers’ Intention to Use Tax E-Filing System in Tanzania:

Controlling for Self-Selection Based Endogeneity. African juonal of Economic Review.

Alibraheem & Abdul-Jabbar. (2016). Tax collection.

Atambo, M. a. (2018). Adoption of Electronic Fiscal Devices (EFDs) for Value-Added Tax (VAT) Collection

in Kenya and Tanzania: A Systematic Review. The Africa Jounal of information and communictaion.

Bernama. (2009). E-filing system.

Chawner. (2021). The management and the usage of electronic resources in academic libraries: A bi-

directional relationship. Ghana: Sage.

Chen, j. a. (2015). Factors affecting online tax filing–An application of the IS Success Model and trust theory.

Computer in human behavioretal, M. (2019). Self-tax assessment system.

EY. (2020). Tanzania Revenue Introduce e-system for tax returns filing. Global Tax Alert.

EY Global Tax Alert. (2020). New e-filing system.

Fishbein. (1975). The theory of reasoned action.

31
Fjeldstad. (2013). Taxation and development: A review of donor support to strengthen tax systems in

developing countries. Denmark: UNU-WIDER 2013.

Goes. (2013). Scope, Limitation, and Delimitation. issertation Success LLC.

Granic, M. &. (2015). Technology acceptance model: a literature review from 1986 to 2013.

Hossaini. (2022). Factors Influencing Usage of Self-tax Assessment System for Voluntary Tax. International

Journal of Contemporary Applied Researches .

Hossaini et al. (2019). lack of accessibility of information technology which is supposed to ease the e-

registration.

Julian, Q. (2019). The impact of online technologies and english medium instruction on university lectures in

international learning contexts: a systematic review. reuniar.

Kagendo. (2019). Factors affecting electronic filing of returns among small and medium enterprises in

Mombasa Central Business District. Mombasa.

Kalyan, S. K. (2017). The IUP Journal of Accounting Research & Audit Practices, Vol. XVI, No. 1, 201746©

2017 IUP. All Rights Reserved. India.

Kamarulzaman, A. A. (10 November, 2009 ). Adoption of tax e-filing: A conceptual paper. Kuala Lumpur,

Malaysia.: African Journal of Business Management Vol. 4(5)

Kim, S. &. (2017). Characteristics of Qualitative Descriptive Studies: A Systematic Review. Wiley online

library.

Madina. (2019). Effectiveness of electronic point-of-care reminders versus monthly feedback to improve

adherence to 10 clinical recommendations in primary care: a cluster randomized clinical trial. USA:

Springer.

32
Madina etal. (2019). self -tax assessment.

Mascagni. (2014). Tax Revenue Mobilistation In Developing Countries: Issues and Challenges. European

Union (Belgium).

Mascagni. (2014). Tax to DGP.

Middleton. (2022). Managing Job-Related Diversity Processes in High-Reliability Teams in the Emergency

Department.

Muwonge. (2011). enhance efficiency in the tax adminstration.

Muwonge. (2019). How Clean is our Taxpayer Register? Data Management in the Uganda Revenue

Authority. Uganda: ICTD.

Obert. (2018). Creation of virtual tax office.

Obert. (2018). Effect of e-tax filing on tax compliance: A case of Zimbabwe. African Journal of Business

Management.

Politik. (2020). The Political Economy of Rainforest Exploitation and Development in Sarawak, East Malaysia

. Global Ecology and Biogeography Letters .

Querol Julián, M. (2019). The impact of online technologies and english medium instruction on university

lectures in international learning contexts: a systematic review. Reuniar.

Riley, T. &. (2017). Theory of Reasoned Action.

Rumanyika & Mashenene. (2014). e- service.

Rumanyika. (2014). Impediments of E-commerce Adoption among Small and Medium Enterprises in

Tanzania. Tanzania: Business Insightz.

33
Sichone, J. (2017). The influence of facilitating conditions, perceived. Dar-es-salaam: Digitales archiv.

Triki, C. y. (2016). Understanding citizens' adoption of e-filing in developing countries: An empirical

investigation. Jounal of high technology Management Research.

trivediet. (2005). economic theory.

Trivediet. (2005). Economic theory.

Vddramootoo, N. a. (2018). What determines success of an e-government service? Validation of an

integrative model of e-filing continuance usage. ScienceDirect.

Venkatesh. (2017). Certified Crop Advisors’ Perceptions of Giant Ragweed (Ambrosia trifida) Distribution,

Herbicide Resistance, and Management in the Corn Belt. UK: Cambridge University Press.

Voxco. (2022). The Impact of train law on small and mediuem Enterprise.

Weru. (2013). MPACT OF STRATEGIC CHANGE: INTRODUCTION OF ELECTRONIC TAX. International

Journal of Economics and Finance.

Weru. (2013). online tax filing.

Wikipedia. (2011). Definition of theory.

34
 APPENDIX I

QUESTIONNAIRE

I am a postgraduate student at Institute of Accountancy Arusha (IAA). As part of the requirements

for the course, am required to conduct research and develop a research report hence the
questionnaire is meant to help in data collection. The information collected will be used for academic
purposes only. The topic of the research is factors affecting electronic filing of returns among
medium enterprise in arusha city.

Please tick (√) the appropriate answer in the boxes provided and write down the appropriate answer
in the space provided; do not write your name on this questionnaire

PART A: USER INTERFACE OF THE SYSTEM

6. Using a scale of 1 to 5 where 5 is strongly agreed, 4 agree, 3 is neutral, 2 disagrees, 1

strongly disagrees.

Please rate how the following cases refer to how you perceive online tax system in Tanzania

Statements 5 4 3 2 1

B1 The system is friendly to users

B2 Low level of risky to file tax returns online

B3 Very useful on using the system in filing tax returns

B4 The system motivates voluntarily tax compliance

B5 No privacy in my business when use the Tax Online system.

B6 TRA has not installed a user-friendly system of online tax

filing

35
PART B: TECHNICAL SKILLS ON ONLINE-TAX FILING

7. Are you aware of the skills required in filing taxes online?

Yes ( ) No ( )

8. Using a scale of 1 to 5 where 1 is very important, 2 is important, 3 is not sure, 4 less important

and finally 5 is not important

Please rate how the following cases refer to technical skills on the online tax system in Tanzania.

Statements 5 4 3 2 1

C1 Knowledge of tax laws

C2 I can calculate taxes and penalties payable using spreadsheet skills

C3 Payment of submitted returns on payment portal

C4 Knowledge of computer and Internet skills

C5 Appointment of declarant with knowledge of Tax (Tax consultant)

36
PART C: COST OF ONLINE FILING

9. Would you say that online tax system is costly compared to manual filing?

Yes ( ) No ( )

10. Please rate the following costs related to online tax filing using a scale of 1. Very Cheap 2.

Cheap 3 not sure 4. Costly 5. Very costly

Statements 5 4 3 2 1

D1 Training cost

D2 Internet cost

D3 Software costs

D4 Computer hardware and software

PART D: ONLINE TAX FILLING

11. Please indicate whether you filed your taxes in the following years

2012/2013 Yes ( ) No ( ), 2013/2014 Yes ( ) No ( ), 2014/2015 Yes ( ) No ( )

2015/2016 Yes ( ) No ( ), 2016/2017 Yes ( ) No ( ), 2017/2018 Yes ( ) No ( )

2018/2019 Yes ( ) No ( ),2019/2020 Yes ( ) No ( ), 2020/2021 Yes ( ) No ( )

2021/2022 Yes ( ) No ( )

37
12. Using a scale of 1 to 5 where 5 is strongly agreed, 4 agree, 3 is neutral, 2 disagrees, 1 strongly
disagrees.

Statements 5 4 3 2 1
E1 Medium Enterprise file their returns on time
E2 Taxes are paid to TRA on time
E3 There is a high degree of efficiency in maintaining financial records
E4 Medium Enterprise file their returns correctly

Interview Guides for the users of electronic filing system

(a). How did you know about e-filing system?

(b). How easy to use e-filing?

(c). What are the major costs relating to e-filing?

(d). What are the technical skills does the users of e-filing require to have in order to file electronic
returns?

(e) How will e-fillers make payments of returns submitted?

(f) What happens when there is interruption or no internet connection?

(g) What will e-filler be required to have as proof of filing?

(h) What happens when the system is not functioning or jam occurs especially on deadlines?

(i) Will there be any alternatives for filing the return such as using the old system of e-filing?

(j) How the e-filer will know that, the return submitted has been received in the TRA system?

(l). What controls has TRA put in place to ensure that the system is not susceptible to hacking or
manipulation?

38
 Appendix 2
Work plan

2023
Jan Feb March April May June July August Sept

Selection of ****
Topic and
Allocation of
Supervisor
Proposal Writing **** ****

Proposal Defense ****

Collection of ****
Data and Analyzing of
Data
Report writing **** ****

Submission of ****
Completed and Edited
Report

FINAL ****
DEFENSE
Submission of Project
Books ****

Missing work * * * * *

Table 2 Table 2 Work Plan

39
Estimated Research Budget
S/NO. ACTIVITIES ITEMS COST (Tshs)

1. Proposal Preparation Typing and Printing 20,000.00

Photocopies 30,000.00

Binding 10,000.00

Transport 20,000.

2. Data Collection Photocopy 10,000.00

Transport 50,000.00

Soft drinks 30,000

Typing 10,000.00

Printing 30,000.00

Binding hard cover & Copies 30,000.00

3. Data Processing & Report Photocopy 10,000.00

Writing
Transport 20,000.00

Printing 50,000

Grand Total 320,000

Table 3 estimated Research Budget

Source of fund: Researcher

40