Abstract:
Scientific literatures as well as practical evidences have reportedly stated that VAT related issues are one of the key challenges that gravely affect the VAT administrations worldwide, more pacifically in Ethiopia. The study was conducted in order to investigate the challenges of Value Added Tax refund practice in Ministry of Revenue a case of Eastern Addis Ababa Taxpayers Branch .The study used mostly quantitative research which administered retrospective method accompanied by qualitative data collection methods. A structured survey questionnaire was administered to collect from a total number of randomly selected 364 VAT registered taxpayers’ recorded data during the period 2012 to 2020 and purposively targeted respondents of 70 Tax Officials working for Ministry of Revenue in Eastern Addis Ababa Branch Office in 2020/2021 fiscal year. The data obtained was checked and edited manually, then coded and entered into excel sheet for analysis using SPSS V 20. Frequencies were generated and presented by tables, graphs and pie charts. The analysis was further supplemented by the findings that were obtained through KIIs, in-depth interview and field observations. Further, sizeable documents were analyzed to supplement the information collected through all the above methods. The findings shown that VAT refund associated with challenges, mainly organized VAT focused corruptions and an over deterioration of VAT refund claim become deep rooted in the Branch Office. Finally, the study concluded with recommendation that the Branch Office has to be determined to avoid or at least to minimize the deep root institutional and taxpayers based challenges including organized refund fraud (corruption and fictitious transaction)as it is deeply and gravely affecting not only the specific Branch Office but also the entire VAT systems of the country. Therefore immediate measures have to be taken
