Sources of Tax Evasion in Addis Ababa City: The Case of Bole Sub City

Abstract

Tax evasion is one of the problems of developing countries including Ethiopia and particularly in bole sub city. Many problems are correlated with tax evasion that includes government budget deviation inaccessibility of social infrastructure in the case area. The main objective of the study is to asses’ tax evasion in bole sub city. The study used both primary and secondary data and stratified sampling technique. The study has significant role to provide information to policy makers, guidelines for the tax authority and help other researchers as reference. Negative attitude towards the tax environment, size of business, duration of residency and the existence of underground economy are major sources of tax evasion. The study was conducted based on both primary sources of data with 60 respondents and secondary sources of data from 2010-2016 which was analyzed using descriptive method of data analysis. As, result tax evasion is high in bole sub city and deteriorates government revenue which results inaccessibility of social services. The researcher recommended that the tax authority to include and develop information with day today computerized activity, aware tax payers about tax circumstances.