Abstract:
Abstract: Value Added Tax (VAT) as one of the important sources of government revenue, its implementation in Tanzania is at its infant stage. This study tried to explore the major problems and prospects of VAT implementation in Iringa Municipal. By considering the population size and availability of large numbers of VAT registered business firms, a total of 57 respondents from VAT collectors (registered business firms) and 44 respondents from VAT payers (consumers) were considered. The data gathered from both business tax payers and ultimate consumers were analyzed using software package of the SPSS version 20. In addition to this, to capture and incorporate all the non-quantifiable data and triangulate the data obtained through survey questionnaire, qualitative data analysis was employed. The results of the study indicated that the willful registration of the businesses has not yet come to the desired level, there is negative perception about the fairness of the payment through the businesses, substantial decline in the number of the customers following the implementation of VAT has been observed, many consumers believe that VAT has been the very motive for business firms to enforce higher price on products or services delivered.
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