Abstract:
Unincorporated business income tax revenue supported by the good tax collection system and practice plays a crucial role in the national and Ambo town economy. Based on this, the main objective of this study is to look into the practical challenges of unincorporated business income tax collection that is basically ascend from the insufficient qualified human facility, and less taxation and tax legislations awareness of unincorporated business income tax community of the town. In doing so, the town’s unincorporated business income tax collection practice is examined in light of the tax objectives, principles, legislations and standards. Qualitative method has been used in analyzing the data collected through the primary and secondary sources of data. The central findings of this study are; first that the underestimated revenue of unincorporated business income tax is being collected in the Ambo town, even though it has better unincorporated business income amenable to the taxation than most of the zone’s and region’s towns, due to its geographical location, large number of population and existence of several productions. Secondly, both taxation and tax laws knowledge are not being mainstreamed among unincorporated business income tax payers and tax staffs, by the town’s Revenue Authority Office to augment the level of this tax community knowledge on the issues of the tax liability, tax regulations, daily and annual income estimation, procedure of applying the tax grievance and importance of taxation, (which leads to; less accrual of unincorporated business income tax revenue). Thirdly, it also indicated that inconvenient and inefficient tax services being delivered by the less and unqualified personnel of the town’s Revenue Authority Office are dropping the amount of the sector’s tax revenues. As a result, the paper argues in favor of the need for both taxation and tax legislations educations and trainings, and the fulfillment of well qualified personnel of the town’s revenue office, to create convenient situation in the taxation of this sector, so as to enhance the principles of certainty, convenience and other taxation objectives to prove the augmentation of the town’s and national growth through the sector’s taxation
