Abstract:
This study was to examine factors affecting revenues collection in the case of Ambo Town
Administration Revenues Authority. The specific objective was to investigate how tax payers
related factors affecting revenues collection, to examine tax collection practice in Ambo Town
Administration and to assess tax payer’s awareness level about tax laws and regulation. Since,
the data was survey in nature the researcher used both qualitative and quantitative research
approach to achieve objectives of the study. The sample size of study areas was 241 of tax
payers for distribute questionnaires and 5 revenues authority department heads for interview
purpose. 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 13 computer
software. The result of the study showed that independent variables introduction to new
technology, tax collection practice and tax payers awareness have positive influence with
business income tax collection and statically significant whereas tax evasion, tax avoidance,
nepotism, political interference and tax noncompliance variables have negative influence with
business income tax collection and statically significant. 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 business income tax payers who fulfill the criteria but not registered to
increase business income tax
