Challenges of Tax Audit Administration in Addis Ababa: evidence from Small Tax payer Branches

Abstract

This study examines chllenges of tax audit adminstration in Addis Ababa evidence from small tax payer branches, and investigates key problems in tax audit operation regarding the appropriateness of audit type used, verification of tax payers income, framework of regulation, audit rate, audit case selection methodes, evaluation and performance measurement, audit examination techniques used, and the experience and capability of audit staff resources. The study adopts mixed method approach in order to achieve the research objectives and to answer research questions. Specifically, the techniques used in the study include survey with tax auditors, semi structure interviews with tax audit head and team leaders and documentary analysis. With these research methods, the results of the study reveal that tax audit program faced diferent challenges and problems which hinder the effectivness of tax audit. The study also shows low audit coverage, the absence of compliance risk-based audit case selection strategy, scarcity of audit resources, tax auditors in particular, lack of appropritate monitoring and evaluation methods and absence of proficient and experienced tax auditors. In the end, the study forwards the possible measures to be taken by the Addis Ababa small tax payer branches to mitigate problems in tax audit operation