Abstract:
This study was conducted to identify the factors affecting collection performance VAT in Ambo
city Administration Revenues Authority. The study was used descriptive research design and
inferential statistics. Since the data was survey in nature the researcher used both qualitative
and quantitative research approach to achieve objectives of the study. The researcher used
stratified sampling technique and the sample size was 240 Value added registered Tax payers.
For this study descriptive statistics and multiple regressions were used to analyze primary and
secondary data to reach the result of the study using Statistical Package for Social Science
(SPSS) version 20 for descriptive statics’ and to test using STATA version 13computer
software. The result of the study showed that independent variables Tax payer’s awareness,
VAT collection practice, Usage of electronic Tax register machine, Maintenance of accounts
and Willingness of customers to buy goods and services with VAT Receipthave a positive
influence with collection performance value added tax and statically significant whereas
Illegal activities and Political pressure variables have negative influence with collection
performance value added tax. This study recommends that the government and Ambo Town
administration Revenues Authority should take corrective action on Tax payers who perform
Tax noncompliance. Revenues Authority should fulfill adequate man power and identify value
added Tax payers who fulfill the criteria but not registered to increase value adde
