FACTORS AFFECTING TAX REVENUE COLLECTION IN THE CASE OF ADDIS KETEMA SUB CITY TAX OFFICE

Abstract

Tax is the major revenues to the government in developed and developing countries. Thus many professionals and authorities strive to enhance the level of tax revenues and make tax revenues significant portion of annual national budget. This study conducted to identify factor affecting tax revenues.Tax payers ‘awareness, tax evasion, tax compliance and tax office capacity were considered as a factors of affecting tax collection in empirical testing. The study used explanatory research design and mixed research approach employed. Data gathered from primary and secondary sources. The primary data obtained by interview and questionnaire. The survey is conducted on category A and category B taxpayers of Addis Ketema sub city and employees of the tax office by the use of purposive sampling. The secondary data collected from reports and manuals of Addis Ketema sub city. Data analyzed with disruptive statistics such as frequencies, percentages, mean and standard deviation through statistical tool of SPSS version 20. The data presented in tables, charts and histograms. In addition, these regression analyses employed to analyze the relationship of variables. The findings show tax revenue affected by tax evasion, tax payer’s awareness tax office capacity and also tax compliance and the regression analysis show that tax evasion has strong negative relation with tax revenues; however, tax Payer’s awareness, tax compliance and tax office capacity have strong positive relationship with tax revenues. This Paper recommended that, the tax office should capacitate in both of human power and technology, so that strengthen auditing work, enhance taxpayer’s awareness.