DETERMINANTS OF LARGE BUSINESS TAXPAYERS TAX COMPLIANCE: THE CASE OF Addis Ababa CITY

Abstract

This study attempts to analyze determinants of large business taxpayer tax compliance in Addis Ababa city Administration. Tax compliance issue is a major problem in revenue generation by government of Ethiopia. This research sought to obtain opinions about tax compliance of large business taxpayers in Addis Ababa. The study has employed a causal research design. In order to the required data gather for this research were both primary and secondary sources. Primary data was collected directly from tax payers through questionnaire survey method and interview from ERCA staff. Secondary data collected from relevant ratify legislation in related with the topic, tax journals, as well as published articles are used. A sample size of 171 is used from the total population of 1,080 large business operators in Addis Ababa cit administration. To ensure the representativeness of different business sectors of taxpayers, a convenience sampling technique was adopted. Multiple regression analysis was conducted to assess the relative predictive influence of the independent variables on the dependent variable. The statistical package for social sciences (SPSS) is employed in the different analyses conducted. The results indicated that knowledge of taxpayer, quality service of tax authority and transparency of tax system had influence on tax compliance of taxpayer and they have positive and significant relationship with tax compliance of large business taxpayer.