The Efficiency of Virtual Financial Data Management System in Increasing Tax Collection: A Cross-sectional Study of Traders in Tanzania

Globally, several countries have been working to enhance the efficiency of tax collection. Various mechanisms, such as the Virtual Financial Data Management System (VFDMS), have been adopted to improve tax collection. This study aimed to assess the efficiency of Virtual financial data management system in increasing tax collection. The study used a cross-sectional survey design. The sample size was 334 traders who had used Virtual financial data management systems. This study used simple random sampling technique to collect data from traders. The questionnaire was used as the main data collection instrument. Data analysis was performed using SPSS version 20. Descriptive statistics using frequencies and percentages were performed, with the information presented in tables. The study results found that VFDMS performs with efficiency thereby increase tax collection. The findings show that more than half of the respondents (56.9%) strongly agreed that the VFDM system does not have any problems performing each transaction. The majority of the study participants (57.8%) strongly agreed that the level of efficiency increases during the day, while most of the respondents (44.9%) agreed that VFDM performance in the field is efficient and predictable. Additionally, nearly half (49.7%) of the respondents agreed that VFDMS stores all information accurately. The study suggests that government through Tanzania revenue authority (TRA) to enhance the efficiency of the VFDM system, further improve tax collection, and ensure that stakeholders feel confident in its use.