Abstract:
The main objective of this research was to examine The Challenges Of E-Tax Filing and Its Role
in Improving Tax Compliance. The research was employed descriptive and explanatory research
design. The source of data was primary and secondary data. The primary data was collected by
using a questionnaire with closed ended formats and structured interview. Reliability test was
conducted to check the consistency of the questionnaire. The target population of the study
includes 631 tax payers in large taxpayer’s office Addis Ababa branch office. A sample size of
243 respondents was selected from registered large taxpayer’s office. Hence the result of the
study revealed that Although the majority of the respondents of large taxpayer’s office towards
E-tax filing have better knowledge and perception, taxpayer’s knowledge to encode data while
use E-filing and their perception towards the use of E-filing does save cost and time is weak.
From the inferential statistics finding result both perception and knowledge towards E-filing
have positive and significant effect on tax compliance and proved by using logistic regression
analysis. It is, therefore, recommended that tax center should focus on giving training to tax
payers on how to encode data while use E-filing, avoid twice tax filling using both E-filling and
paper, solve the problem of interruption of power and enhance internet connectivity, increase the
quality of the system and also since 80.0 % of the variation of tax compliance explained by
knowledge and perception of tax payers, the tax center better to give more attention on
knowledge and perception of tax payers.
