TAX ASSESSMENT AND COLLECTION PROBLEMS OF CATEGORY “A” TAXPAYERS: IN THE CASE OF MINISTRY OF REVENUE EASTERN ADDIS ABABA TAXPAYERS BRANCH OFFICE

Abstract

Taxation is principal method by which a government gains revenue into its budget. That revenue goes into a vast number of items, from paying debt, defending the potential for implementing certain policies to paying for public services and welfare benefits and the military etc. Many developing countries are facing different challenges to introduce modern tax system. This is due to poor tax administration and taxpayers’ resentment towards taxes. The goal of this research is to investigate tax assessment and collection problems of category ”A” taxpayers in the Ministry of Revenue, Eastern Addis Ababa taxpayers branch office were the target population of the study. The data collected from the taxpayers’ and tax officers were the main sources of data for the study. In this regard, a total of 141 taxpayers have participated in the study as a source of information. In addition, the researcher interviewed senior tax officers to support and checkup the reliability of the data collected using survey method. Descriptive statistics such as percentages, frequency, were used to summarize the study findings and present the results. Generally, findings of the study revealed that most of the taxpayers do not have the required knowledge of tax assessment and collection procedures as well as the rules and regulation of the government. Besides, taxpayers do not get updated information and essential training. In addition to this, the number of staffs who are supporting in the tax assessment and collection department are insufficient and inefficient comparing to the number of taxpayers in the branch office. Moreover, skill gap (lack of adequate skill) and low motivated tax assessor and collectors are also mentioned as of the part of the finding. Due to this and other reasons mentioned in the analysis ; negligence, delay in tax payment and evasion are taken by taxpayers as solution to escape from payment. Thus, it is recommended that the branch office (the tax authority) should provide sufficient training for both taxpayers and staffs, promote transparency, introduce modern IT technology and strengthening legal enforcement.