Factors Affecting Revenue Collection In The Case Of Ambo Town Administration

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