Abstract:
The main purpose of this study was to investigate the factors that affect tax compliance of category ‘C’ tax payers in Ambo Town. To achieve the objective of this study the researcher used both primary and secondary data and descriptive and explanatory research design. In conducting the study, a model was constructed that holds tax compliance as dependent variables and Institutional Factors, Government Trust , Economic Factor, Organizational strength of tax authority, Macro Related Factors , Demographic Factors, Awareness level of tax payers, Personal Factors and Social Factor As independent variables. The data was collected from category C tax payers of Ambo town from 271 respondent’s selected by simple random sampling techniques. The data were analyzed by using regression model. The result shows; the researcher concluded that the tax compliance is explained 72.23% by the independent variables used in this study also the result of this study revealed that, Organizational strength of tax authority, Demographic Factors, Awareness level of tax payers, Personal Factors and Social Factor were statistically significant factors at 1% significant level whereas Institutional Factors, Economic Factor and Macro Related Factors were statistically significant at 5% significance level. Finally, the researcher suggested that, the tax authority should be act more on awareness programs and modernizing and improving the capability of the tax office
