Voluntary Tax Compliance Of Category A Taxpayers: Evidance From Burayu City

Abstract

This study investigates the determinants of voluntary tax compliance among Category A taxpayers in Burayu City, employing both descriptive and inferential statistical analyses. A total of 225 individuals participated in the study, yielding a response rate of 80%. The research identifies key factors influencing tax compliance, including education, tax audits, government spending, referral groups, financial constraints, awareness of penalties, and tax knowledge. Findings reveal that higher educational attainment and awareness of penalties positively correlate with tax compliance rates. Conversely, financial constraints negatively impact compliance, as individuals facing economic hardships prioritize immediate financial obligations over tax payments. The study highlights the importance of taxpayers' perceptions of government effectiveness and fairness in spending as critical elements shaping compliance behaviour. The results suggest a significant proportion of respondent’s exhibit non-compliance, necessitating governmental action to address factors affecting tax revenue. Recommendations include enhancing tax education, increasing the visibility of tax audits, improving transparency in government spending, and supporting financially strained taxpayers. By fostering a culture of compliance through community engagement and clear communication of penalties, this study aims to contribute to improved tax compliance rates in Burayu City. Future research directions are proposed to further explore the dynamics of tax compliance behaviour