The Factors Affecting Tax Compliance In Addis Ababa City Government Revenue Authority; The Case Of Kolfe Keranyo Sub-City Small Tax Payer’s Branch Office

Abstract

This study focused to analyze the factors that affect tax compliance in Addis Ababa city government revenue authority the case of Kolfe Keranyo sub city small taxpayer’s branch office. Tax compliance is the major factor in revenue collection of Ethiopia. This research was focused on obtaining opinion about tax compliance of the tax payers of Kolfe Keranyo sub city small tax payer’s branch office. The study has done on descriptive and explanatory research design. In gathering data both primary and secondary sources were used. In case of primary data questioners, interviews and observations and also secondary data were used. The sample sizes were 120 from 16,052 tax payers and 40 from 472 staffs of the branch. Stratified random sampling technique was be category of business tax payers: A, B and C will be used 120 tax payers and purposive sampling technique will be use employee. Accordingly, 40 persons were selected from selected Kolfe Keranyo sub-city who has adequate experience on the study issues and willingness to participate in the discussion. Data were collected using self-administered questioners to the branch. The responses of collected data were analyzed using SPSS software (V 21) and the findings also presented using tables and figures. The findings shows the limitations of the simplicity of tax laws, treatment of customers by tax authority, payment of tax returns based on annual turnover are affects tax collection and it also affected social service rendering. Regarding to tax knowledge and education there were a gap on tax laws given by tax authority on submission of documents to tax authority, reporting of tax returns, and the payment of the taxpayers voluntarily. The relation of tax compliance on tax collection performance, taxpayers trust with tax authority. Finally the researcher concluded and recommended that the tax authority improve the tax systems, simplifying tax laws to understand by taxpayers, trained the tax payers and staffs 0f the branch for better service, tax collection performance and to enhancing the tax compliance levels by the taxpayers of the branch.