Abstract:
The major objective of this study was to examine the business income tax revenue
collection performance and its challenges the case of Burayu City administration the
case of “A” tax payers. The study has four research objectives. A descriptive research
design was adopted. The study populations were Burayu City Administration Revenue
Authority Tax official and Category “A” tax payers of the city administration. A purpose
sampling method was employed in order to select the respective sample size from the
city’s tax official revenue authority and a simple random sampling method was used for
the tax payers sample size selection. Both primary and secondary sources of data were
been used in this study. The primary was collected through questionnaire while the
secondary data were collected from the archival records of Burayu City Administration
Revenue Authority for the period spanning from 2008 E.C.-2013 E.C. In order to
undertake the statistical analysis, excel and SPSS soft wares used as an analysis tool. A
descriptive statistics like percentage employed for analysis purpose and the analysis
results were presented in the form of tables, pie charts and graphs. The finding have
shown the tax revenue of the case city to a major extent is derived from category “A” tax
payers. Besides, the contributing factors for the low level of voluntary compliance by the
tax payers is attributable to lack of awareness, poor collection enforcement, ability,
carelessness and intentional. The obstacles for category “A” tax payers to comply with
the tax law and regulation is associated with employees incapability, weak audit
program, partiality, tax payers know how about tax and services being delivered by the
city’s revenue authority’s from a range of factors view point. Then based on the findings
obtained it is suggested that the city’s administration need to give more attention to
category “A” tax payers of it parallel to other tax payers, provide periodic capacity
building trainings to its employees, improve its audit program and improve or create
smooth relationship with its tax payers and improve its service delivery practice. Further,
there is a need too to conduct awareness creation campaigns and provide related timely
trainings to the tax paying community under its administration.
