Abstract:
This research investigates the impact of tax audits on revenue collection within the Addis Ababa Revenue Bureau, with a focus on evidence from the Addis Ababa No. 2 Branch Office through a combination of descriptive and inferential research design and quantitative research approach. The study examines factors such as tax audit resources, auditors' capacity, audit case selection, revenue protection systems and tax automation. Primary data were collected through structured questionnaires. Purposive sampling deign were employed in the study. The analysis provides valuable insights into the relationship between tax audits and revenue collection in the Addis Ababa No. 2 Branch Office, contributing to the existing knowledge in the field and offering recommendations for improving revenue collection strategies. The result shows all predicting variable have a positive and significant relationship with revenue collection. So the findings reveal a statistically significant increase in revenue collection. Furthermore, the study emphasizes the importance of considering employee perceptions in implementing tax audits and revenue collection initiatives to enhance efficiency and effectiveness in revenue collection processes. In conclusion, this research highlights the significance of regular tax audits as a crucial tool for revenue enhancement and promotes ongoing evaluation and adaptation of revenue collection strategies to optimize revenue collection efforts, promote financial stability, to ensure transparency within tax administration, , regulate income fluctuation and Audit case selection. Finally the study suggest that the branch office should increase the number and improve the capability of total audit staff resources to achieve required audit rate and audit quality that might improve overall revenue collection performance. Auditors should have been given continuous training so that their skills are kept up-to-date and relevant. Further, the bureau should supply sufficient computers and other necessary audit resources for auditors
