Abstract:
The purpose of this study was to investigate factors that affect municipality revenue
management practice that hinders the effectiveness of revenue collection in West Shoa Zone
Ginchi town. To conduct this study, descriptive and explanatory research design were
employed. Three (3) Kebeles were selected using convenience sampling technique.
Consequently, 58 (85.3%) employees from the town and 308 tax-payers from total kebeles
were selected by simple random sampling method. In addition to this, 8 management
committee members were selected by purposive sampling technique. While questionnaire was
used as main tool, interview and document analysis were used to substantiate the gathered
quantitative data. Frequency, percentage and significance value computed from Mann Whitney U test was used to analyze data. Beside to this, linear regression analysis was used
to detect the effects of predictor variables (Revenue base assessment, Proper forecasting
method, Employee qualification and Reward system) upon dependent variable (revenue
collection).The qualitative data obtained from interview and document analysis were also
described by narration. Subsequently, the findings of the study revealed that the
implementation of revenue management practice in accordance with government strategy
and policy was poor in the municipality. The study also identified that, the strategy used in
the municipality in mobilizing revenue collection practice to achieve the intended plan was
not satisfactory. Beside to this, lack of proper management tools and technique, poor
practices of revenue planning; lack of proper rewarded system and lack of sufficient skilled
man power were the hindering factors of revenue collection practices of the town. Finally, to
minimize the problems regarding revenue management practice, it is recommended to give
relevant trainings for tax-payers and tax collectors to upgrade their performance level;
adequate technical support should be crucial for the effectiveness of revenue collection
practice in the municipality. Furthermore, the study suggested that concerned bodies should
offer their valuable efforts to enhance the effectiveness of revenue collection of the town
