The impact of ICT on Taxation: the case of Large Taxpayer Department of Tanzania Revenue Authority

Abstract

This article examines how the use of ICT has modernized Tax administration procedures and improved revenue collection at Large Taxpayer Department of Tanzania Revenue Authority. ICT was introduced into the department in 2001 for facilitating maintenance and timely access of records and fast processing of return so as to remove postal delays; minimize operational costs; curb cheating and plug revenue loss (TRA 2010e). Large Taxpayers and Large Taxpayer Department staff (100%) agree that, since 2001 time for processing return and responding to queries have been reasonably shortened (Victor–Nyambo 2009). TRA reports reveal that, actual revenue collection increased from TZS. 204,397.5 Millions in 2001/02 to TZS. 1,605,751.2 Millions in 2008/09 while revenue contribution share rose to 41% in 2008/09 from 23% in 2001/02. Although other factors in the economy like; increased internal trade, reduced importation and more reliance to home products may cause the increase, if there is no good tax administration, revenue will not be reflected in collections. The fact that revenue has increased proves that, ICT use enhance better tax administration.

Keywords: Taxation, Tanzania Revenue Authority, ICT, Large Taxpayer Department, Computerised Tax administration system