Determinants Of Tax Revenue Collection Performance In Addis Ababa: The Case Of Merkato Number 2 Medium Taxpayers Branch Office

Abstract

The main objective of this study was to investigate the “Determinants of Tax Revenue Collection Performance in Addis Ababa: The Case of Merkato Number 2 Medium Taxpayers Branch Office”. To achieve this objective explanatory and descriptive research designs were applied to investigate the relationship that exists between the level of tax revenue performance and its determinants factors. In this study, a mixed research approach was applied. For this purpose, primary sources of data were utilized which were collected using a self-administered structured questionnaire, and interviews from sample respondents. Based on sample size, the questionnaire was sent to 365 of the 6221 taxpayers and 11 tax audit managers were interviewed in this study; of these, only 342 were used for data analysis, with office workers making up approximately 91% of the sample selected by simple random sampling and purposive sampling for interviews. Descriptive and inferential statistics were used for data analysis. The results from the analysis found that the independent variables have a xiii statistical significant effect on tax revenue performance in the Case of Merkato Number two Medium Taxpayers Branch Office in Addis Ababa. The study has revealed a positive and significant effect on tax revenue performance. Therefore, this study concluded the presence of problems in case of tax revenue performance in which affects the probability of collecting tax revenue. The study recommends the selected office to strengthen tax revenue by providing systems that enable to collect tax revenue properly.