CHALLENGES OF MEDIUM TAX PAYERS: THE CASE OF ADDIS ABABA NO. 1 MEDIUM TAX PAYERS BRANCH OFFICE

Abstract

This study was conducted to assess challenges faced by tax payers in the case of Addis Ababa No. 1 medium taxpayers’ branch office. The data was collected from taxpayers and tax officials through questionnaire and in-depth interview. The study has used both primary and secondary sources of data. Out of the total population of 4,289 semi-structured self-administered survey questionnaires were distributed to the taxpayerswho appear at ERCA until 209 respondents obtainedby using simple random sampling. Moreover, this thesis applied descriptive research design, and used mixed research approach.Before the statistical analysis, data was collected from the primary survey was compiled, edited, and coded. Then, data was analyzed using a computerized data analysis package known as SPSS version 16. The study showed that taxpayers face various challenges with the existing tax system. The findings reveal that the tax system is so problematic, complex and unfair, discretionary treatment by officers; existence of poor customer service and higher compliance costs.Finally, the thesis suggested a series of measures which could be taken by tax authorities. Such as giving extensive and frequent training to its staff, using appropriate technology to capture the data of taxpayers, implement online tax payment system, properly handle issues related to CRM, train and educate tax payers using various medias, fairly and equally treat payers and improve tax refund procedure.