ASSESSMENT OF LARGE TAXPAYERS’ PERCEPTION TOWARDS THE EXISTING TAX SYSTEM IN ADDIS ABABA

Abstract

Issues related to tax payers’ perception towards the tax authority have received great attention around the world. Their perception towards the tax system seems to obtain the degree of voluntary tax compliance. Therefore, understanding tax payers’ perception towards the tax authority is an important issue for any government and revenue collecting authority particularly in a self‐assessment environment. To achieve the research objective researcher has adopted a quantitative technique. The objective of this study is to assess how the Addis Ababa town taxpayers perceive the existing tax system in relation to tax fairness, tax efficiency and tax Knowledge. A survey using self-administered questionnaire has been used to collect the primary data. A total number of 294 sample sizes were administered and questionnaires have distributed to the respondents. Of the 294 copies of questionnaires distributed to respondents, only 275 were dully completed and returned and all were used in the analysis. The researcher has adopted the five-point Likert scale rating method for this study. The statistical package for social sciences (SPSS) version 20.1 was employ in the different analyses to run the results. In order to achieve the objective of the study, descriptive analysis has been applied. The collected data are described using mean and standard deviation. The study reveals that, the Addis Ababa town tax payers perceive the Ethiopian tax system as fair in terms of administrative fairness. It is also complex and economically inefficient from tax payers’ point of view. As the tax system has its own loop hole that leads to corruption. Based on the findings obtained and conclusions drawn the researcher recommend that, the tax authority in particular state expenditure and utilization of tax money should be noticed as a sensitive issue and government in general shall try to empower the tax payers with knowledge and changing their perception through sustainable awareness creation transparent system between the tax payers and the Authority.