Assessment of Tax Evasion Practice of Category A And B Taxpayers: In The Case of Sebeta Sub City.

Abstract

The purpose of this study was to asses of business income tax evasion in category A and B taxpayers: In case of Shagar city administration of sebeta Sub city tax payers. Therefore, this study identified current tax evasion prevalence in Sebeta Sub City revenue office, examines the reasons and the methods of these tax evasions, and analyse methods to control or minimize tax evasion. In doing so, both qualitative and quantitative data were obtained from both primary and secondary data sources using collection tools such as interviews, questionnaires and from reports of investigated sub city have been used .Descriptive method of data analysis was used to analyse and interpret the data. The target population was a total of 57 employees of Sebeta Sub City Revenue Office who are working in different major section and category ‘A’ and ‘B’ tax payers of the sebetat sub city. Among the total target population, 57 employees were selected by using census method and random sampling method was used for tax payers of the sub city .SPSS model 25 version was also used to analyse and interpret the data. The result shows that tax payers perception towards tax system is negative as they do not full committed and initiated to pay their tax liability. The tax payers of the sub city also engage in different types of tax evasion which can maximize the extent of tax evaded and because of this the sub city losing significant amount of money (i.e. birr168,353,205.98 on average per year). The tax office is also inefficient in terms of different activities to compact tax evasion. Therefore, the recommendation is that the most effective tool for making people more positive is to empower them with knowledge and changing taxpayers attitude through sustainable awareness creation program, the tax office needs to enhance the level of voluntary compliance by providing effective and sufficient education and training service not only for the taxpayers but also for staff members regularly and the level of punishment should be stricter and the legal provisions for doing this should be clearly stated