Electronic fiscal devices in Tanzania

Project Active from to State, Tax and Tax for Growth

This project, conducted in collaboration with the Tanzania Revenue Authority (TRA), aims to develop an interactive dashboard that can unlock the potential of Electronic Fiscal Devices (EFD) data.

Improving the efficiency of tax collection is key to reach sustainable and inclusive economic growth. In many developing countries tax collection is typically low due to evasion, corruption, and poor taxation technology. Several tax authorities in Africa have recently introduced Electronic Fiscal Devices (EFDs).  

EFDs are devices with fiscal memory that have the capacity to generate tax invoices that are transmitted to the revenue administration in real-time. The potential of EFD technology to improve tax compliance in developing countries is multi-faceted. It is possible to track taxpayers on a high frequency basis. Consequently, EFDs could be a rich source of information to improve tax-related management practices. However, it is necessary to properly archive and process the information generated through these devices. 

The current application and utilisation of EFD data to inform the Tanzania Revenue Authority (TRA) operations are limited due to the lack of management tools that can process the raw data. This project aims to develop an interactive dashboard that can unlock the potential of EFD data.

First, we will construct a dashboard to help understand what is happening on the ground. This will be a user-friendly platform with crucial metrics and indicators, focused on flexibility and data visualisation. Cross validation with other sources will be crucial as third-party reporting is a key factor to lower evasion. The final step is to combine the EFD data with other sources; linking taxpayers across databases could help identify inconsistencies and improve tax collection.