A Study on Assessment of Tax Administration System on Category ‘B’ Tax Payers, Gamo Gofa Zone, Snnpr, Ethiopia

Abstract

Taxation is a system of raising money to finance government. without taxes to funds its activities, government could not exist. Currently, in Ethiopia revenue collected from tax is increasing due to improvement in tax collection methods and decrease evasion. Besides, tax administration system in Ethiopia is still facing many problems. The aim of the present study were tried to investigate variety of problems in ''tax administration system of category ''B'' tax payers’’ in Arba Minch and Sawula towns from tax payers as well as tax collector point of view. In order to achieve the objective of the study, the researcher used stratified random sampling to select 286 respondents out of the 1006 category B tax payers. Moreover, quantitative and qualitative data were collected through open and close ended questionnaires and through interview respectively. The finding of the present study showed that Low level of  awareness of tax payers to VAT and profit tax, resistance against VAT registration, lack of ethics are identified a major problems in identifying those category B potential taxpayers. In addition, unwillingness of taxpayers to pay their tax liability timely is major problems hindering the effective tax assessment and collection practice of the authority. Taxpayers rather than being silent and refrain due to the poor services they have been rendered they would be beneficiary if they are keen to consult the authority’s concerned officials in any issue related to tax matters and problems they are being facing.

Keywords: Compliant cost, Category B tax payers, Tax administration