ASSESSMENT OF BUSINESS INCOME TAX PAYERS COMPLIANCE: A CASE STUDY IN ETHIOPIAN REVENUES AND CUSTOMS AUTHORITY WESTERN ADDIS ABABA BRANCH OFFICE

Abstract

Taxes are vital and every citizen is mean to reap benefits of these taxes. That is why it is important that citizen endeavor to pay taxes. Understanding the factors that influence tax compliance is important for collecting the necessary tax. This study was conducted with the aim of investigating the factors that influence business income taxpayers’ compliance in Ethiopian revenues and customs authority Western Addis Ababa branch office. The target population for this study was 12,383 from these 122 samples were selected using convenience sampling. A qualitative research approach was employed. Questionnaires for the business income tax payers and interview for ERCA tax professionals were conducted. Both primary and secondary data were used and the collected data was summarized and presented in tabular form using proportions and percentages. The findings of the study show that tax rate, early auditing , strengthening legal enforcement , simplicity of tax laws, regular following up of tax payers, ethics of the accountants employed, perception of government spending, perception of fairness and equity, corruption in tax audit, training and referent group are factors that influence business income tax payers compliance. Finally ERCA should improve tax compliance by Strengthening audit, adequate training, simplifying the tax rules and by devastating method of information access.