Factors Affecting Revenues Collection On Category "A'' And '' B'' Tax Payers In The Case Of Ambo Town Administration, Oromia Regional State, Ethiopia

Abstract

This study was to examine factors affecting revenue collection in the case of the Ambo Town administration revenue authority. The study was used Explanatory Research design, and mixed research approach. Data gathered from primary and secondary sources. The primary data obtained by interview and questionnaire. The data was collected from category „A‟ and category „B‟ taxpayers, and revenue authority employees and Head department of the Revenue Authority. The secondary data collected from annual reports and official document records of Ambo Town Administration Revenue authority. The researcher Took 242 sample size from a total population of 611 Tax payers by Purposive and Stratified method, and 80 employees by Census Method, and 5 Head, departments of Tax Authorities of the study areas determined by purposive technics for interview purpose. For this study, descriptive statistics and multiple regressions were used for data analyze reach the result of the study using Statistical Package for Social Science (SPSS) version 20 for descriptive statistics‟ and to test using STATA version 15 computer software. The result of the study showed that independent variables such as tax payer awareness, record keeping, tax collection practice, and Using new technology have a positive influence on business income tax collection and are statistically significant, whereas tax evasion and tax avoidance variables have a negative influence on business income tax collection and are statistically significant from the tax payers point of view. All revenue authority employees‟ variables had a positive influence on business income tax collection and were statistically significant except nepotism. This study recommends that the government and Ambo town administration Revenues Authority should take corrective action against tax payers who perform tax noncompliance. Revenues Authority should fulfill adequate manpower and create continuous follow up in order to improve revenue collection performance.