The Effect Of Tax Audit On Tax Compliance The Case Of West Shoa Zone Revenue Office

Abstract

Based on this, the study examined the effects of tax audit on tax compliance and revenue of tax revenue in Oromia West shoa zone revenue authority, Ambo City Administration and woreda office. It specifically investigated the effect of comprehensive audit, issue audit, back duty audit and de-registration audit on tax compliance and revenue of tax revenue in OromiaWest sho'a zone revenue authority, Ambo City Administration and woreda office. A close-ended questionnaire was used to gather the needed data and an analysis was carried out through correlation matrix and multiple regressions. It was discovered that Comprehensive audit, Issue Audit, back duty audit and de-registration audit had a positive significant effect on tax compliance and revenue in West sho'a zone revenue authority, Ambo City Administration and woreda office with the p-value of 0.000, 0.014, 0.000 and 0.000 respectively. Worthy of note was that De-registration audit was the most significant predictor out of all the predictor variables. It was concluded that tax audit could engender tax compliance and revenue in West sho'a zone revenue authority, Ambo City Administration and woreda office. It was therefore recommended that West sho'a zone revenue authority, Ambo City Administration and woreda revenue office should intensify tax audit through the employment of more competent staffs and intermittent training in order to increase in tax compliance level in the branch office. Also, Audited files that reveal criminal act should not be taken slightly and tax evaders and avoiders should be seriously dealt with to deter others from plodding the same criminal path.