THE ASSESSMENT OF TAX ADMINSTRATION IMPLEMENTING AUTOMATION -THE CASE OF LARGE TAXPAYERS BRANCH OFFICE (ERCA)

Abstract

Modern tax administrations proactively facilitate compliance by simplifying processes, providing information, education, and support to taxpayers, and directing their limited compliance monitoring and enforcement resources to the areas of greatest risk to revenues. Efficiency of tax administration is defined as costs, tax clearance time and effectiveness of revenue collection. However, the systems are tied with challenges because of lack of awareness creation from the side of authority, incapacity of supplier for the sales register machines, lack of awareness in implementing tax automations from the side of the taxpayers. The objective of this study is to assessing the challenges faced by both taxpayers and tax administration in implementing the tax automation by investigating the performance of tax collection and tax assessment by use of information technology systems of sales register machines, E- taxing, by use of purchase declaration system and SIGTAS in the large tax payer office of ERCA . Mixed methods of both qualitative and quantitative approach are applied in that the relevant data required for the study are collected through questionnaires and focus group interviews. Samples are selected by use of random sampling technique. From the response obtained, the participants of the information systems encountered problems by each of them are identified. The major findings of the study are lack of coordination among participants ,lack of knowledge and commitment to deliver satisfactory service ,lack of infrastructure , delay in service delivery of maintenance of sales register machines , knowledge gap exists on suppliers of machines, the users of systems and tax officers , and lack of awareness creation by tax authority. From this, it is concluded that to solve the problems encounter the participants of the systems need of coordination among the participants , it needs continues education and training and awareness creation by tax office are essential for success of the systems. In this study, the participants of the systems provide their respective responses for the challenges they are facing. Based on the findings, the necessary recommendation for the implementation of tax automations by the tax authority are the tax authority and tax office must conduct self examination and fill their gap, should change their approach of awareness creation, the tax office should set up incentive mechanisms to bring them in to the systems, there should be active cooperation and participation among the participants are the basic ingredients to realize good tax administration, and the attitudes of all the participants (include taxpayers, Suppliers of sales register machines and Staffs of Tax office) are required to change.