Abstract:
This study investigates the factors influencing the voluntary tax compliance behavior of Category 'A'
business profit taxpayer: a case of Ambo Town Revenue Authority. Employing explanatory research
design, the study surveyed 278 Category 'A' taxpayers using a stratified random stratified sampling
followed by random sampling from each stratum. The taxpayers were stratified into trade, service
and manufacturing sector process according to their field of work. The study used both descriptive
and inferential statistics methods of data analysis. More specifically, the data was analyzed using
Pearson correlation matrix and Ordinary Least Square (OLS) regression model. The results of this
study show that, tax knowledge, perceived fairness of the tax system, referral networks, and the
likelihood of an audit positively and significantly influence taxpayers' voluntary compliance.
However, negative attitudes toward government expenditures exert a substantial negative impact on
compliance behavior. These findings highlight the need for targeted interventions of Ambo Town tax
revenue authority to improve tax knowledge, ensure fairness, and foster trust in government spending
in order to foster voluntary tax compliance
