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Performance Determinants of Business Income Tax Collection: A Study Conducted in the Boditi Town Revenue Collecting Branch Office, Wolaita Zone; SNNPR,Ethipia.

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In order to financing public expenditure, government tax by reforming and restructuring the existing tax system. Boditi Town Administrative Revenue office is one of local government office levied and collects taxes like business income tax for the provision of goods and services for the society, but the revenue office is not able to collect the tax revenue as expected. The objective of this study is to identify determinants of business income tax collection performance in Boditi Town Administrative Revenue Office: The researcher was used descriptive research design with quantitative and qualitative techniques..Both primary and secondary data were used. The total population of this study was 255. To determine the required sample size the Yamane sample determination formula was used and Sample size of this was 155. Stratified random sampling technique was used to select 155 respondents and 8 officials 8 experts selected by using purposive sampling technique. Five likert scale questionnaires and interview were used to collect required data and simple and advanced statistical tools were used to analyze collected data. 77.3% of variance explained by six tax collection performance determinant variables. Research recommend that taxpayers should have give information about their business to the revenue office and revenue office should create positive approach and awareness about taxpayers Taxpayers should maintain books and records to their business, revenue office should give training to taxpayers to how books of account are maintained. The revenue office should enhance the employee's capacity to improve tax collection performance.
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International Journal of Business and Management Invention (IJBMI)
ISSN (Online): 2319 8028, ISSN (Print): 2319 801X
www.ijbmi.org || Volume 7 Issue 8 Ver. IV || August. 2018 || PP35-46
www.ijbmi.org 35 | Page
Performance Determinants of Business Income Tax Collection: A
Study Conducted in the Boditi Town Revenue Collecting Branch
Office, Wolaita Zone; SNNPR,Ethipia.
Alemayehu Elda Ergo
(Lecturer, At Wolaita Sodo University College of Business and Economics, Department, Management
Wolaita Sodo Ethiopia)
ABSTRACT:In order to financing public expenditure, government tax by reforming and restructuring the
existing tax system. Boditi Town Administrative Revenue office is one of local government office levied and
collects taxes like business income tax for the provision of goods and services for the society, but the revenue
office is not able to collect the tax revenue as expected. The objective of this study is to identify determinants of
business income tax collection performance in Boditi Town Administrative Revenue Office: The researcher was
used descriptive research design with quantitative and qualitative techniques..Both primary and secondary
data were used. The total population of this study was 255. To determine the required sample size the Yamane
sample determination formula was used and Sample size of this was 155. Stratified random sampling technique
was used to select 155 respondents and 8 officials 8 experts selected by using purposive sampling technique.
Five likert scale questionnaires and interview were used to collect required data and simple and advanced
statistical tools were used to analyze collected data. 77.3% of variance explained by six tax collection
performance determinant variables. Research recommend that taxpayers should have give information about
their business to the revenue office and revenue office should create positive approach and awareness about
taxpayers Taxpayers should maintain books and records to their business, revenue office should give training
to taxpayers to how books of account are maintained. The revenue office should enhance the employee’s
capacity to improve tax collection performance.
KEYWORDS: Business, Collection Determinants, Income, Tax, performance
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Date of Submission: 17-08-2018 Date of acceptance: 31-08-2018
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I. INTRODUCTION
1. Background of the study
Different authors have defined tax in different ways. Tax is a compulsory contribution (levy) payable
by an economic unit to a government without any expectation of direct and equivalent return from the
government for the contribution made (Bhatia, HL, 1976). Tax is the most important source of government
income, where country‟s governments collect a large amount of income through taxation. However tax is a
compulsory levy and those who are taxed have to pay the sums irrespective of any corresponding return of
services or goods by government. ( Kagave,2005) , Confirmed that tax administration is the identification of
tax liability based on the existing tax laws, the assessment of this liability and the collection, prosecution and
penalties imposed which covers a wide area of study encompassing aspects such as registration of tax payers,
assessment, returns processing, collection and audits. (World Bank, 1991), in most developing countries, like
Ethiopia, the revenue generated by the government is quite less than the expenditure spent. This low revenue
yield of taxation can only be attributed to the fact that tax provisions are not properly enforced either on account
of the inability of administration or on account of straight forward collusion between the administration and the
tax payers.
In Ethiopia, tax is administrated on Federal or Central and Regional levels. The constitution of Federal
Democratic Republic of Ethiopia (FDRE) under articles 96-100, has separated the tax revenue to be collected by
the federal government, state or regional government and jointly by federal and regional government. The
regional government of Ethiopia collects taxes and revenue by bureaus of regional Inland Revenue authorities
from privately owned enterprises and organizations of regional governments.
Whereas, the central government revenue collection organs are responsible to collect revenues of federal and
joint revenues owned by both the central government and regional governments from different organization
including those owned by federal government. The sharing of revenue between the federal government and
regional governments take in to consideration such things like the ownership of source of revenue, the regional
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character of sources of revenue, convenience of levying and collection of tax and duty, population distribution
of wealth, standard of development of each region, and other factors that are basics for integrated and balanced
economy.
The tax assessment for those who are required to maintain financial records or books of accounts is done based
on the records that the tax payers maintain however, if they fail to maintain financial records, assessment will be
done by estimate. For the rest of tax payers who are not required to maintain financial records it is based on the
standard assessment method Council of Ministers (FDRE council of ministers, income Tax regulation No. 78/
2002) The revenue office is not able to collect the tax revenue as expected because the fairness and equity, tax
payer‟s talent, attitude towards business income tax, government regulation, and tax collectors inefficiency are
some of the determinants that different scholars highlighted. Hence, this study is to identity the main
determinants that hider business income tax collection performance and to fill the gaps by using possible
mechanisms in Boditi town Tax authority branch ,Southern Nation Nationality People‟s Region (SNNPR)
Ethiopia.
1.2 Statement of the Problem
To finance the public expenditure, government needs funds through different mechanisms and sources
of finance. These sources of finance could be raised through tax and non tax sources. The source of tax revenue
may be direct or indirect taxes that the government levy and collect from the citizens. Among direct taxes
business income tax one of the taxes collected by government to finance expenditure. It is imposed by the
government on the taxable business income/ profit of a business realized from entrepreneurial activity( Misirak
,2011) According (Demirew, 2005) business income tax is a corporate tax which is taxed from businesses that
are run by one person or by a set of partners are taxed as part of the owners in come. As per these authors‟ all
taxes are taxed under personal income tax system. Tax law of Ethiopia not specifically defines the term business
income or profit so that it is considered in its natural and commercial meaning. Business income also called
business profit or schedule „C‟ income refers to any income or profit which derived essentially from business
activity or an activity recognized as trade in commercial code of Ethiopia. It is income or profit derived by a
trader from activities performed to its customers subject to certain deductions of business expenditures. Income
or profit derived from the entrepreneurial activity is treated as business income /profit ( Misirak ,2011) In
Ethiopia the assessment and collection of tax, the declaration of incomes by tax payers provides the basic data
for the assessment of the taxpayers‟ income tax liabilities by tax activities protects the tax payer's from arbitrary
imposition of the tax authority. It also ensures voluntary tax collections by tax authority. The declaration of
income by a tax payers' as a major input so as to determine whether the tax payer shall continue in the same
category or his category be changed for the following year. In order to assess and collect the required taxes from
the taxpayers' by the appropriate Tax Authority, the incomes of a given year with the necessary supplementary
documents shall be declared to the concerned tax officials. But, where a taxpayer who is required to maintain
books of accounts fails to do so, or fails to declare his income within the time period set in the income tax
legislation, or the books of account maintained by tax payers are unacceptable to the tax authority the standard
assessment method is used.
According to (Demirew, 2005) complexity of tax law, regulations and directives to assess and collect
tax administration problems of tax office, unawareness of taxpayers about benefit of the tax for country
development, lack of competent personnel to assess and collect tax, noncompliance of taxpayers, weak tax
administration have been reducing tax to be collected and negatively affecting government to achieve its
objectives. On contrary, clear and applicable tax rules and regulations, competent tax officers, taxpayers
awareness about the benefit of tax, strong tax administration contribute to the government to achieve the
objectives specified in the constitution. The Boditi Town Administrative Revenue Office is one of the tax
administrative offices found in the Southern Nation Nationalities Peoples Region (SNNPR) and operates in the
environment that the above types of problems may identify. Thus the focus of the study will be problems on
business income tax assessment and collection in Boditi Town Revenue Office. Accordingly, this study was
attempted to give responses to the following research questions: What are the major challenges that face Boditi
Town Revenue office in business income tax collection and What Administrative problems exist with the
collection of business income tax?
1.3 Objectives of the Study
1.3.1 General Objective
The general objective of the study is to assess the determinants on the collection of business income tax at
Boditi Town Revenue office.
1.3.2 Specific Objectives of Study
I. To identify the major determinants that affect business income tax collection performance
II. To evaluate whether the revenue office collects the business income tax as planned or not.
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II. REVIEW OF RELATED LITERATURE
2.1. What is Taxation and Tax?
According to ( Misirak ,2011) Taxation is a system of raising revenue by government through tax. It is
a method of collecting funds by a government from tax sources to finance its operation. Taxation is also a means
by which a government, through its law making body raises internal income through tax for the use and support
of the government and enables it to discharge its appropriate functions. In a similar manner,( Bhaita , HL
,1998),also defines the word tax as “a compulsory levy payable by an economic unit to the government without
any corresponding entitlement to receive a definite and direct quid pro quo from the government for the
contribution made. “
2.2 Classification of Taxes
Different authors and scholars classify taxes in many different categories and classifications based on
the angles they have looked. The most commonly made is between direct and indirect taxes. The idea is usually
underling this distinction is that a direct tax is really paid by person on whom it is legally imposed, while an
indirect tax is imposed on one person, but paid partly or wholly on another, owing to a consequential change in
the terms of some contract or bar gain between them( Misirak ,2011).
In Ethiopia taxes are classified in to direct and indirect taxes with their own proclamation numbers.
Direct taxes refer to those taxes that are paid by the person who earns income. Direct taxes, the impact and
incidence fall on the same person. It is borne by the person on whom it is levied and cannot be passed on the
others. According to (FDRE council of ministers, income Tax regulation No. 78/ 2002) of the country, direct
taxes are employment income tax (schedule A) ,rental income tax( schedule B ),business income tax (schedule
C), and other income (schedule D ). Indirect taxes are taxes are taxes which borne by someone other than the
person responsible for paying them. The indirect taxes in the country are value added tax VAT, Turn over tax
(TOT), excise tax, stamp duty, and import taxes. These taxes have their own proclamation.
2.3 Schedule “C” Income Tax or Business Profit Income
Business tax plays on important role in the public revenue of Ethiopia government. Unlike the tax
treatment accorded to business in most other, the Ethiopian business income tax regulations are applied to all
forms of business enterprises corporations, partnership and sole proprietorship. The incorporated bodies one
countries subject to a specific tax rate and all other enterprises are subject is uniform progressive tax rate on net
business income. Business income tax is the most important source of direct tax revenue for the government;
certain small businesses are taxed on presumptive basis by applying available coefficient(depending on type of
business) to the enterprises goes turn over business income tax is changed on the profit of business enterprises
or their activities arising each accounting period (FDRE council of ministers, income Tax regulation No. 78/
2002). The following are schedules available in the Ethiopian taxation system: Schedule „„A'' income tax or
employment income, Schedule‟‟ B‟‟ income tax or rental income; Schedule ''C'' income tax or business income;
Schedule ''D'' income taxes or other income includes: royalty income, income from rendering technical service,
income causal rental of property, interest income or deposit and income from capital gains.
2.4 Time of Declaration of Income and Payment of Taxes
`Tax payers under schedule C income have to follow the procedure stated in the tax for declaring their
tax income. The period of declaration depends on the category which they belong. The procedures may be
summarized as follows: Tax payers who are categorized as “Aare required to declare their taxable income
within four months from the end of the tax period. For example, if the tax payers follow the fiscal year period
from 8th of July 7th July the income has to be declared and paid till 9th November during a leap year according
to the Ethiopian calendar. Those taxpayers categorized as “B” is required to declare their taxable income within
two months from the end of the period. For example, if the taxpayers follow the fiscal year; the one year period
from 8th of July to7th July the income has declared and paid till 6th of September during a leap year according
to Ethiopian calendar during a leap year according to Ethiopian calendar). Category” C” taxpayers should
declare tax income together with the annual turnover and the amount derived from the sources other than the
main operation within 30 days from the end of fiscal period, 6th of August every year) Declarations are to be
made in prescribed forms provided by the income tax authority accompanied by the required supporting
evidences.
2.5 Categories of Business Income Tax Payers in Ethiopia
As per the income Tax regulation No. 78/2002, for the purpose of assessment and collection business
tax, tax payers are categorized in to three namely, category “A”, “B”, and “C.” Category “A” tax payers: which
shall include any company incorporated under the laws of Ethiopia or a foreign, and any other business having
an annual turnover of birr 500, 000 (five hundred thousand Br) or more as per aforementioned regulation article
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18(1) .Category “B” tax payers, as per aforementioned regulation article 18(2) unless already classified as
category “A” any business having an annual turnover of over 100,000 (one hundred thousand Br). Category “C”
tax payers :according to the aforementioned regulation article 18(3), unless already classified in category A and
B whose annual turnover is estimated by the tax authority as being up to birr 100,000 (hundred thousand birr).
2.6 Business Income Tax Administration
Tax laws and Regulations
According to (Higgins, M., 2007) the Primary authorities consist of constitution, new tax laws enacted
by higher legislative bodies and incorporate by revenue authority.
In Ethiopia, in accordance with article 55(1) and (11) of constitution income tax proclamation No
286/2002(FDRE council of ministers, income Tax regulation No. 78/ 2002) has been proclaimed. This
proclamation has different chapter and sections. Regulations are issued by the council of ministers pursuant to
article 5 of the definitions of powers and duties of executive organs of the Federal Democratic Republic of
Ethiopia( FDRE, national constitution,1995) (as amended) and article 117 of the income tax (FDRE council of
ministers, income Tax regulation No. 78/ 2002). Thus, the Tax Authority has powers and duties of
implementation and enforcement of this proclamation and regulations issues here under, not withstanding
anything to the contrary in any other law the tax authority shall be empowered to investigate any statements,
records and books of accounts submitted by any payer of any time by:(a) Sending duly accredited inspectors to
the place of business or practice of the tax payer to check same or any vouchers, stocks of other material items
of the tax payer;(b) requiring the tax payer or any employee thereof who has access to or custody of any
information, records or books of account to produce the same and to attend during normal office hours at any
reasonably convenient tax office and answer any questions relating thereof;(C) requiring any person including
Municipality, Body, Financial Institution Department or Agency Of Federal or Regional Government to disclose
particulars of any information or transactions, including any lending or borrowing which it may have relating to
the tax payer.
2.7 Tax Assessment
Tax assessment refers to initial review by the tax authority of the tax deflation and attached supplementary
documents submitted by a tax payer and a verification of the arithmetical and technical occupancy of the
declared tax liability and tax payable shortly after the submission of the tax declaration. Once an income
declaration is checked and verified by the concerned tax authority through a process called income tax
assessment. Hence the assessment is the end result of the process of ascertaining a tax payer‟s taxable income
and the payable on that income ( Misirak ,2011)
2.8 Tax Collection Procedures
Collecting tax is a challenging task for tax authority especially when there are large numbers of tax
payers with different taxes. Usually tax laws requires tax authorities to furnish tax payers with non technical
statements that explain taxpayers' rights and the tax collectors' obligations with respect to tax assessments and
audits; the procedures for taxpayers to seek review of adverse decisions of the collectors in tax assessment,
claim returns, and file complaints, and the procedures the tax authorities may use to enforce tax liabilities. Tax
laws also states the legal enforcement procedures the tax authorities may use to collect taxpayers tax debt if a
taxpayers fails to pay, or make arrangements to pay and assessed tax liability. It is to be interest of citizens and
taxpayers that all tax levied by law different public purposes be promptly collected, that all delinquent taxes be
fairly and promptly enforced and collected by all lawful means available to the collecting authority or his lawful
agents or attorney and that when collected, tax monies be transmitted to the appropriate receiving agencies as
soon as is practicable. In general, tax collection involves some procedures. The main tax collection procedures
are:
2.8.1 Identification of legal tax source
It is clear that governments impose different taxes. There are different objectives that the government
wants to achieve by imposing taxes. Governments levy tax to finance legitimate government activities, to
discourage consumption of some products, to stabilize economy, to encourage activities, to ensure a fair
distribution of income in the society, and so forth. T o achieve those and other objectives, government uses taxes
as personal income tax, business income tax, value added tax, excise tax, sales tax, custom duties, and stamp
duties. To implement and administer those taxes proclamations directives and regulations are issued by
concerned bodies. Different taxes are governed by different proclamations directives, regulations and
statements. As the result the first step is the smooth application and collection taxes to identify the appropriate
legal tax sources that governed each of these taxes. This will help to identify the obligations and expectations of
both taxpayer and the tax administer.
2.8.2 Specification of legal collection period
Taxes are collected at different time depending on the nature of the tax and the size of taxpayer. Taxes
are usually paid monthly, semi annually, and annually. Each tax payment period has specific payment due date.
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2.8.3 Preparation of Appropriate Tax Collection Forms
Taxpayers communicate their tax related affairs with tax authorities through tax return forms. Tax
return forms are documents that contain financial and other tax related pertinent about the tax liability of the
taxpayers. These forms are used to communicate to the tax authorities about the tax liability of the taxpayers.
Normally, tax return forms contain the name, address, the tax identification number, and financial items that
determine the tax base and tax liability of the taxpayer. The formats of the tax return forms are not uniform
throughout the world. Different countries are different tax return forms. The formats are also subject to change
whenever there are needs to simplify the tax return procedures. Furthermore, for tax types different tax return
forms are used and filing tax returns may not be a simple task especially when the forms involve many pages
full of technical terms with many things to be filled. Different tax return form provides professional service to
different taxpayers to assist them in properly filling their tax return.
2.8.4 Processing Tax Collection Deposits Properly
Once tax liability of each taxpayer is determined and tax return forms are completed, tax authorities
collect taxes in any appropriate manner. To effectively administer the tax collection procedure, tax authorities
uses different methods to collect taxes from taxpayers. One approach is to require tax payers to pay their tax
liability directly to the tax authority office. This requirement may make the collection effort very difficult, as
their will be a long line to pay ones' tax liability. The other alternative is to uses Commercial Banks as a tax
collection centers so that tax payers will not be required to come to the tax authorities office, rather they will pay
their tax at nearby Bank branches. Taxes must be paid on or before the dead lines. In some cases tax authorities
may allow short term extensions on larger amount of income taxes. This is simply an extension of time given to
the taxpayer to make full payment of the liability. The extensions may be granted in persons by telephone or by
correspondence.
2.9 Factors that Affects Awareness and Compliance of Tax Payers
2.9.1 Fairness and Equity
As mentioned by (Smith, 1976)], one of the main principles of taxation system design is equity and
fairness, which can be perceived by two dimensional views. Horizontal equity (people with the same income or
wealth brackets should pay the same amount of taxes) and vertical equity (taxes paid increase with the amount
of tax base). The most obvious requirement of equity or fairness is to treat equal people in equal circumstances
in an equal way. The problem here is in deciding who is equal to whom. If a specific group perceives that their
tax liability is higher than other group, the tax evasion may occur among the group members.
To sum up, regardless of this inherent problem, ensuring the fairness or equality of a tax system is second to
nothing. In another word, a good tax system is essential that it should appear equitable to the tax payers.
2.9.2 Culture and Social Norm
According to (Fjeldstand, o.and Ranker, L, 2003), increased efficiency of tax administration, however,
is not enough. Many observers conclude that lack of taxpaying culture is the largest obstacle to build affirm long
term revenue base. The opposite may, however, also be the case as long as the tax administration culture is
perceived to be influenced by sectarianism, nepotism and corruption; it is unlikely to contribute to the fostering
of a more conducive taxpaying culture. Gaining a better understanding of why do and do not accurately reports
and fully pay the taxes they owe is obviously interesting to policy makers (Smith, 1976)
In the case of tax payers‟ behavior, there are legally defined rules about incomes to declare and
deductions to make as well as punishment that follows from the rules, if detected. But, the essence of a social
norm is not basically what legally defined; rather, it is informal or socially defined rules specifying what actions
are regarded as proper and correct, or improper and incorrect. The rules are based on interests, values and
attitudes developed within the group. The concept of sanction goes hand in hand with the concept of social
norm; sanctions are the groups‟ punishments for violation of social norms. Thus, a social norm is composed of a
socially defined rule of behavior based on common values, backed up by a system of sanctions. Norm obedience
may follow from internalization of the norm and the values up on which it is founded, or an effective system of
sanctions. It is often argued that tax evasion, or tax compliance, is determined by prevailing social tax norms to
substantial extent
2.9.3 Taxpayers Education
Information should readily be available to service users in language(s) they understand. (Bird, R.M and
Old man, O., 1967) also noted in many countries of the world tax payers assistance, information and education
is one of the fundamental concerns of tax administration in their effort to achieve the maximum possible level of
voluntary compliance by tax payers. In order to comply with the law, tax authorities must provide their citizens
as developing clear forms and instructions, providing points of contact to request and secure information about
their duties and responsibilities under the tax law, to foster reasonable high level of compliance and minimize
problems.
In Ethiopia where the knowledge and access for information about tax matters is very low, tax payers
education have been assumed as a major determinant to bring tax payers in to the track of compliance.
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Complexity in the tax law and its administration can easily baffle taxpayers and leads to compliance problems.
In adequate planning for taxpayers‟ education and outreach may significantly impact compliance in ever
changing complex tax environment.
Therefore, taxpayers‟ education and access to information is very essential in promoting compliance. Tax payers
must receive clear and concise information on what is taxable, how to calculate their tax liabilities, and
procedures for calculating and paying taxes and where and when they pay taxes. In addition, forms and
procedures for calculating and paying taxes should be as simple as possible. Thus, educating tax payers and
keeping them well informed with the sentences of being an evade understanding obligation may be important, as
a prevention measures is better than cure.
2.9.4 Organizational Strength of Tax Authorities
A study conducted by (Richardson, G., 2008), suggested that the role of a government has a significant
positive impact on determining attitude towards tax. He also suggested that government should increase its
reputation and creditability in order obtain trust from tax payers.
A tax system does not function in the vacuum. Its relationship with at every turn are with the public
and since the combination of taxes reaches nearly every individual in one way or another; the administration
finds itself dealing with the nation as a whole, hence inevitably its operations and effectiveness are affected by
the attitudes of the nation towards the tax system (Bird, R.M and Old man, O., 1967)
Generally, although previous studies could not provide conclusive results on the measurable impact of
the efficiency of the government on the compliance, however; researchers from different countries have
discussed this issue and some authors have described how the role of government in inducing tax compliance is
important and relevant.
2.9.5 Attitude towards the Government
Taxes are the price paid for the government services and taxes payers are generally are sensitive to the
way the government uses tax revenue. Therefore tax payers perceive their relationship with the state not only as
relationship of coercion, but also as one of exchange. Individuals will feel cheated if taxes are not sent
efficiently. Studies on the relationship between the specifics of actual government spending and tax compliance,
particularly on tax evasion, are very limited. Logically, taxpayers, and especially those who pay high amounts of
tax, will be sensitive to what the government spends their money on. Although there is limited empirical
evidence, it is reasonable to assume that taxpayers will tend to evade tax if they perceive that the government
spends tax money unwisely. However, in most developed countries like the United Kingdom which implement
Pay as You Earned (PAYE), it is quite difficult to evade much of their tax liability as deductions are made at
source for the majority of many tax payers‟ liabilities (Bird, R.M and Old man, O., 1967)
In summary, the government should prudently spend taxpayers‟ money because the way in which the
government spends the money produces different level of compliance. Taxpayers‟ perceptions are potentially
are important in determining their compliance behavior.
2.9.6 Competency of Tax Experts
The broad range of knowledge, skills attitudes and observable behavior that together account for the
ability to deliver a specified professional service. Competence also involves adoption of a professional role that
values accountability to the public and leadership in public practice industry, government, and education. The
particular tasks that public tax experts perform while applying or bringing to bear, pervasive qualities and skills
and that are characteristic of public experts to level of proficiency defined in professional competency
requirements for public. The professional qualities and skills that all public tax experts are expected to bring to
all tasks the “how” of tax collection work (Bhaita, HL1998)
According to [8] the Professional Competency Requirements for Public tax experts identify pervasive
qualities in three categories: ethical behavior and professionalism, personal attributes and professional skills
which are defined as follows: Ethical Behavior and Professionalism: the tax expert profession is committed to
maintaining the confidence of clients, employers and the public through an overriding commitment to integrity
in all professional work. Thus all public tax experts are expected at all times to abide by the highest standards of
integrity; they must be and be seen to be carrying out all work objectively and independently, in accordance
with the ethical values. Personal Attributes: Tax experts are expected to develop a number of personal qualities
that shape the way they conduct themselves as professionals. Professional Skills: Tax experts are also expected
to possess a wide range of professional skills that, while not unique to the tax experts‟ profession, are critical to
it successful practice.
III. RESEARCH METHODOLOGIES
This section of the study shows details of the research design, the sampling methods as well as the manner in
which the data are collected and analyzed and research area profile
3.1 Research Design
The research employs descriptive types of research with triangulating quantitative and qualitative
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techniques. In this research is to identify, understand and interpret the existing situation of assessment and
collection of business income tax and challenges associated with it in the study area and also helps to describe
the qualitative aspect of taxpayers' interest and perception towards the existing situation of assessment and
collection of business income tax and challenges associated with it.
3.2 Sampling and Sampling Techniques
3.2.1 Sampling Techniques
Tax payers and Boditi city Administration Revenue Office employees were be taken as the target
population of the study. The total number of taxpayers in category “A” and “B” are 53 and 202 respectively.
The office employees are totally 28(they are head of the revenue section, revenue audit and legal enforcement
process and tax payers‟ education section). The researcher stratified sampling technique to make the sample
representative of the population. The stratified random sampling were used to select sample from taxpayers who
have similar character by categorizing them in to two groups(strata).The two strata are category “A” and
category “B” taxpayers .The total taxpayers population of Boditi administrative office under the study is 255.
3.2.2 Sample Size
This study applied a simplified sample size determination formula provided by Yamane (1967) in order
to determine the required sample size at 95% confidence with the level of precision 5% (Yamane, Taro, 1967).
This sample size determination method is more applicable when the sampling population is known and finite
and it is also statistically permutable to commit 0.01 to 0.1 level of bias in study process and to determine the
required sample size the following Yamane formula applied in this study below:-
…………………………….. (1)
Therefore, the sample size of this study was
n= = 255
1+255(5%) = 155
Where
- n - is the sample size, = 155
- N - is the population size, = 255
- e - is the level of precision(sampling error) =5%
Non probability sampling method, purposive sampling technique was used for the tax officials to
gather data from them. Out of 28 employees in the office the researcher was gathered data from 8 officers whose
activities are directly related to the problem that the researcher was studied and recommended the problem
3.3 Data Source and Collection Tools
Both primary and secondary data were used. Primary data were obtained from the tax payers, the tax
officials and employee of the office. On the other hand the secondary data were collected from books, websites,
records and other related literatures. The researcher was used five likert scale questionnaires to collect data. The
questionnaire was translated in to Amharic for English is not the language of the respondents. The questionnaire
was distributed to the tax payers and employees of the office in the study.
.3.4 Methods of Data Analysis
The quantitative data gathered through questionnaires and annual reports of the revenue office were
analyzed and interpreted by using simple descriptive and advanced statistical tools (correlation and regression
models). Finally the output has been analyzed and interpreted in such a way that plausible answers would be
sought for the question raised in the study.
IV. FINDINGS RESULTS AND DISCUSSION
4.1 Responses Rate of the Taxpayers:
From 155 questionnaires prepared and distributed 149 has been collected. The presentation, analysis
and interpretation were based on this 96.12% of the sample about the whole population.
4.2 Description of respondents general back ground
Among 149 tax payers who returned the questionnaire (89.58 %) of the respondents are male, 10.42%
of the respondents are female. The proportion of male and female participated in the business activity and
registered for tax payers; in both categories the male respondents took the greater number of proportion than
female. Age bracket of the respondents classified under three categories. Among the total respondents majority
of the respondents 75% are between 31-45 years old. These respondents range from 18-30 years old and greater
than 45 years old are 12.5% each. It indicates that majority of the respondents are youth age life.
Educational level of respondents from 149 respondents 4.17% , 14.58% , 20.83% , 1 33.33% , 25%
and 2.08% are illiterate, Primary secondary, 12 complete, diploma and first degree respectively. From the above
Performance Determinants Of Business Income Tax Collection: A Study Conducted In The Boditi Town
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information the majority of the respondents‟ educational levels were above elementary level and they can read
and write easily. This in turn indicates there is opportunity to the tax authority to teach and give training and
awareness creation to the taxpayers and they can easily understand rules and regulation of tax and tax related
issue. Lastly, depending on their willingness tax payers start their business at different times out of 149
respondents, 14.58%, 27.08% ,41.67% and 16.67% were started their business less than 2 years, 2-5 years, 6-
10 years and above 10 years respectively. This shows most of businessmen had started their business at arrange
of 6-10 years. This indicates the most number of tax payers contributed the revenue to the tax authority.
Moreover, the tax payers who have started their business before 10 years contributed more tax revenue relative
than the others to the revenue office.
4.3 Performance of the business income tax
Table 1 Annual Plans and actual collection of business income tax
No
Year
Plan
Performance
percentage
changing
Percentage
change in
plan
Percentage
change in
performance
1
2010/2011
230,000
293,712,53
27.7%
-
-
2
2011/2012
621,988
411421.43
(33.86)%
170.4%
40%
3
2012/2013
790,643
615150.98
(22.2)%
27.12%
49.5%
4
2013/2014
980,470
905294.89
(7.7)%
24%
47.2%
5
2014/2015
1,100,000
943788.71
(14.2)%
12.2%
4.3%
Source: annual report of revenue office, 2014
Organizations can be evaluated through comparison of their proper plan and actual performance. The
actual business income tax revenue collection performance of Boditi Tax Authority branch office has increasing
trend as shown in the revenue collection data for the past five years. As shown in table 1 above, the secondary
data show that performance of business income tax collection by Boditi Town Administrative Revenue Tax
Authority branch office viewed as growth actual business income tax from 2010/2011 to 2014/2015. But
performance from 2010/2011 to 2014/2015 with plan is not achieved. Business income collection plan in every
year is increasing but actual performance is decreasing. From the table 1 above, one can conclude that in every
year plan of collection of business income tax is increasing but performance is below the plan. This shows that
there was non-collect able revenue or arrears in the administrative office this shows there is presence of
taxpayers who are not paid their tax liability properly in each calendar year. Another problem here is annual
plan is not prepared in accordance with their category is not suitable to compare which category pay properly
and which not.
4.4 Correlation analysis:
The table below indicates that the correlation coefficients for tax collection performance and its independent
variables are linear and positive ranging from strong to medium level coefficients.
Table 2. The Relationship b/n Tax Collection Performance & Determinant Variable
Variables
Correlation ,significance and
sample size
Fairness and Equity
.787
.000
149
Culture and Social Norm
.729
.000
149
Taxpayers Education
.682
.000
149
Organizational Strength of Tax
Authorities
0.574
.000
170
Attitude towards the Government
0.462
.000
149
Competency of Tax Experts
0.551
.000
149
Source: field survey (2015)
As it is clearly indicated in the above 3 a strong positive relationship was found between tax fairness
and equity tax collection performance (r = .787 , p < .000), Culture and Social Norm has strong positive
Performance Determinants Of Business Income Tax Collection: A Study Conducted In The Boditi Town
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relationship with tax collection performance (r =.729, p < .000), There is substantial, relationship between
Taxpayers Education and tax collection performance (r = .682, p < 0.00), There is also substantial,
relationship between Organizational Strength of Tax Authorities and tax collection performance (r = .574,
p < 0.00), There is a weak relationship between Attitude towards the Government and tax collection
performance (r = .462, p < 0.00), and finally Competency of Tax Experts has substantial association with
tax collection performance ( r = .551, p < 000) . Correlation coefficient squared (R2): The correlation
coefficient squared (known as the coefficient of determination, R2) is a measure of the amount of variability in
one variable that is shared by the other.
4.5 Regression model summary and One way ANOVA
Table 3 model summary
Source: field survey (2015)
The regression summary model indicated that the co-efficient (R) with a value of 0.879 and co-efficient
of determination (R2) with the value of 0.773 or 77.3 % confirms that the six identified variables attributes 77.3 %
of tax collection performance determinants while the remaining 22.7 percent could be explained by other
influencing factors which did not included in this study. To conclude that ,all six identified study variables
were statistically significant(p<0.05).
One way ANOVA (analysis of variance)
The study further used one way Analysis of Variance (ANOVA) in order to test the significance of the
overall regression model. Green &Salkind (2003) Explains that one way Analysis of Variance helps in
determining the significant relationship between the research variables
Table 4 ANOVA (analysis of variance)
ANOVAb
Model
Sum of Squares
Df
Mean Square
F
Sig.
1
Regression
62.959
6
10.493
80.698
.000a
Residual
18.464
142
.130
Total
81.424
148
a. Predictors: (Constant), X6, X4, X5, X1, X3, X2
b. Dependent Variable: Y
Source: field survey (2015)
Table 4- hence shown the regression and residual (or error) sums of squares. The variance of the
residuals (or errors) is the value of the mean square which is 10.493. The predictors X1 up to X6 represent the
independent variables as the major factors determining tax collection performance. The above table presents
the results of ANOVA test which reveal that the six independent variables notably; have a significance influence
on tax collection performance. Since the P value is actual 0.00 which is less than 5% level of significance is
large enough to conclude that the six independent variables significantly determine the tax collection
performance of Damot Gale woreda.
Table 5 Coefficients
Coefficients
Model
Unstandardized Coefficients
Standardized
Coefficients
t
Sig.
B
Std. Error
Beta
(Constant)
-.620
.204
-3.036
.003
Fairness and Equity
.569
.063
.507
9.091
.000
Culture and Social Norm
.242
.076
.208
3.179
.002
Taxpayers Education
.183
.065
.175
2.804
.006
Organizational Strength of Tax
Authorities
.059
.064
.048
.917
.361
Attitude towards the Government
-.116
.052
-.116
-2.246
.026
Competency of Tax Experts
.221
.046
.233
4.777
.000
Performance Determinants Of Business Income Tax Collection: A Study Conducted In The Boditi Town
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a. performance of tax collection
Source: field survey (2015)
As indicated in the above table 5, the Sig -value proves or disproves the significance of the impact. A
Sig -value is said to be significant if it is less than the level of significance, (5%).If the Sig-value is considered
significant (is less than the specified level of significance),
In table the regression model above has established that taking six independent variables into account
notably; X1-X6 constant at Zero influences tax collection performance will be (0.620). The results presented also
shows that taking all other independent variables at zero, a Fairness and Equity constitutes 56.9%, the
researcher observed most of the tax payers especially category “B” tax payer do not maintain books of accounts
and record. The reason they mentioned that most of them are currently upgraded from category “C” to category
“B” and up grading is not based on our income and not fair, as their thinking to upgrade taxpayers was given to
the revenue office as quota. From this the researcher suggested up grading itself must be based on their income
return and discussion is necessary with business person about upgrading. Another reason they mentioned not
maintain books of account was they assumed that it incurs additional cost to them and assumed that Tax
Authority didn‟t accept the tax return statement even if they maintained. Most of them give their reasons why
they have said unfair. Assessment did not base on our earnings. Even we maintain books of account or records
most of the time it is not accepted by tax authority and the method used to determine tax liability was standard
assessment. But standard assessment committees (estimation committee) were not well trained. Assessors and
tax collectors do not diligence for taxpayers‟ problem and did not consider the existing business environment.
As their response tax assessors and collectors motive was only collect tax liability from tax payer, no care has
be done for tax payers.
Culture and Social Norm 24.2%, the respondents reasons tax payers are not know their obligation
properly and they (taxpayers) fear to declare as it increases tax burden.
Taxpayers Education 18.3%, as it has been revealed from respondent‟s distribution majority of the tax
payers does not have full knowledge about tax rules and regulation. The reason they mentioned were they are
not participating in awareness creation program and, tax rules and regulations are not simple to understand.
Another reason they mentioned was awareness creation conducted by revenue office was not sufficient to
understand the rules and regulations of tax. They responded for the question how much time awareness creation
was conducted by the revenue office in a year, majority of the respondents responded twice in year. Based on
the above respondent‟s idea the researcher recommended to the revenue office: taxpayers education must be
took highest time of their activity in a year.
Organizational Strength of Tax Authorities 5.9%, , the researcher observed that non penalty of
criminal makes tax collection in efficient and most of the tax payers adopt this behavior and makes challenge to
the administrative revenue office. So in addition of waiver of penalty, to serve the country‟s law application of
criminal penalty is necessary. Attitude towards the Government 11.6% from this the researcher concluded that
least number of taxpayers have positive attitude to declare their income .Majority of tax payers does not have
good attitude to declare their income. So, the revenue office should have some home work to teach and train tax
payers to declare their income honestly and declaration alone does not impose tax burden on them.
Competency of Tax Experts 22.1 % constraint levels in tax collection performance of Damot Gale
Woreda tax colleting Authority. . As the researcher‟s observation, there are a number of constraints, which make
the tax payers not to be certain about tax liability. Among such constraints lack of timely assessment of tax
payers tax liability , lack of trustiness between taxpayers and tax experts, lack of proper maintenance of books
of accounts and records of taxpayers were some of the constraints that have been encountering in the office not
to be certain on the tax liability.
Inferences can therefore be made that x1-x6 determines tax collection performance From the regression
findings, the substitution of the equation
(Y= β0+ β2X2 + β3X3 + β4X4+ β5X5+ β6X6) becomes: Y= 0.620-0.569x1+.0.242x2+.0.183x3+0.059x4 -
0.116x5+0.221x6 ………………………………………………………………………………………. (2)
Where Y is the dependent variable (tax collection performance) X1-x6 are predictors. From the results Fairness
and Equity is critical problem and Organizational Strength of Tax Authorities has minimal influence on tax
collection performance of study area
V. CONCLUSION AND RECOMMENDATION
5.1 Conclusion
Tax has the impact of reducing undesirable products, promoting investment and development and
reducing regional inequality, establishes economy, reduces imbalance between rich and poor. This goal can be
achieved when it has good tax structure, clear rules and regulations, competent tax experts‟ compliance
taxpayers and effective and efficient tax administration system. This particular study explores the problems in
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business income tax assessment and collection in Boditi Town Administrative Revenue Branch Office. It
attempts to assess the applicability of business income tax laws and regulations, compliance of tax payers about
business income tax based on available primary and secondary data. The data has been gathered from sample of
48 taxpayers, 8 experts and secondary sources which are related to the area of study. According to the data
gathered, majority of the taxpayers can write and read most tax experts with degree and the rest are diploma
holders. From sample taken 10(20.83%) of them were category “A” and 38(79.17%) of them were category “B”
taxpayers. Based on the information obtained from these sources, the detail of the study has been concluded as
depicted below. Boditi Town Administrative Tax Authority Branch Office has implemented a business income
tax assessment collection system using the tax rate stated by central government. The taxpayers‟ identification
and registration has been fully implemented. Rules and regulations of the business income tax settee by central
and regional governments are implemented by administrative branch office but there was a gap to implement it
fully. The business income tax assessment and collection of the administrative revenue office was inefficient
to the findings of the study. Factors to this inefficiency of tax assessment and collection are weak assessment
potential, lack of awareness creation to taxpayers, unfair and inequitable tax assessment by tax experts. The
amount of business income tax paid was not consistent due to non maintenance of books of accounts, this
causes some times overstated or/ and understate income. Similarly less awareness and less compliance of
taxpayers and experts made the business income tax assessed was not be collected as it should be. The actual
collected amount of revenue from business income was not significant the year 2007/2008 to 2011/2012. This
indicates weak planning ability of the office in the tax revenue mobilization.
As per the data obtained from both sources and interview made there are non continuous follow up as
rules and regulation to upgrade taxpayers category. Due to this most taxpayers are not voluntarily accepting up
grading of their category. From data obtained from the revenue office there are 27 taxpayers were up graded in
2011/2012 from category “C” to category “B”. But majority of them were complaining in their up grading. As
the taxpayers response it is not based on their income. Based on the tax payers and tax experts response there
were tax evasion and tax avoidance in the study area. There were arrears of tax liability in the area due to an
effective application of tax rules and regulations. In addition application of penalty due to non compliance was
not applicable as tax laws and regulations issued by region or central government properly. The willingness of
taxpayers to declare their income was also less. Tax payers were not accepting neutrality of tax office appeal
committee.
There were programs to create awareness to taxpayers in the office. But tax payers were not
complying with tax rules and regulations. For example majority of category “B” taxpayers were not maintain
books of accounts; even category “A” tax payers were not maintain at all. But maintenance of books of account
for category “A” and “B” was obligation in proclamation issued by Central and/or Regional council. Most
taxpayers didn't participate in the awareness creation of the office. This is due to lack of good relation with tax
experts. As taxpayers' response tax experts were not trust in taxpayers. This has been encountering the tax
payers to pay their tax liability with voluntarily. Majority of taxpayers responded their failure to maintain books
of accounts due to lack of knowledge and awareness. This shows there is a need to support taxpayers to prepare
the book of account by tax experts. An interview made with the head of the office and tax assessors group
leader, the applicability of penalty due to failure of maintaining books of account, failure to declare their
income, failure to pay their tax liability on time and non-declaration of their income etc was not fully
implemented.
According to data obtained tax experts competency was not at full amount to assess and collect
business income tax. As the interview of tax experts and observation of the researcher appeal committee were
established as income tax proclamation of 56/2003 of SNNPRS'. But as the taxpayers‟ response appeals
committee are not neutral, because they are not free from the influence of the revenue office. Generally, there
was inefficient and ineffective base for tax assessment and collection system in Boditi Town Administrative
Office. The administrative office collected small amount of business income tax revenue which has insignificant
share of covering expenditure. This inefficiency and ineffectiveness arose from incompetence of employees,
inefficient tax administration, presence of less awareness of taxpayers, presence of non comply of taxpayers to
tax laws and regulations, improper implementation of principles of taxation.
5.2 Recommendation
Based on the data obtained from primary and secondary sources, providing recommendation is one of
the objectives of the study, the following recommendations has been drawn based on the findings obtained and
conclusions arrived that needs improvement on the assessment and collection of business income tax in the
revenue administrative branch office.
Improve the business income tax assessment of the revenue office:
The revenue tax office should change the system to workable one. The revenue office should make
Performance Determinants Of Business Income Tax Collection: A Study Conducted In The Boditi Town
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taxpayers in category “A” and “B” to use cash register electronic Machine which increase trustiness of tax
assessor and taxpayers. Moreover, the mechanism of determination of tax liability should be changed. To this,
standard assessment committee of tax payers and other committee members should be knowledgeable, skilled
and well experienced. Special training should be given to the assessment and estimation committee members on
the standard assessment.
Strengthen business income collection mechanism of the office The tax collection should be economical. To
be the tax liability collected from the taxpayers on a specified time. If it is not happen after teaching taxpayers
the tax administration department should take an appropriate enforcement action/penalty on the tax delayers,
evaders, non declarers and etc take actions such as, court action and seizing property. The revenue office should
use mechanisms to encourage early taxpayers and those who voluntarily declare their income without violation
of law give incentives such as tax refund and awards. This is advisable to motivate tax payers. In order to
identify and levy fair tax liability among all taxpayers, to detect prevalence of tax evasion, the office should
develop the capacity of tax experts and officials through continuous training and education.
Create awareness among taxpayers: Taxpayers in both category “A” and “B” has luck of full knowledge
about tax rules and regulations. So clarification on business income tax rules and regulation for the taxpayers is
very essential to enhance business taxation system of the revenue office. Most taxpayers educational level was
primary and above. This is the opportunity to the revenue office to teach and train taxpayers about tax rules and
regulations such as, how to maintain books of accounts and records of their income as well as their expenses and
other tax related issues.
Install effective and efficient tax administration system: Improve tax administration system by applying
internal controlling system and tax auditing in order to apply tax compliance .To make tax liability certain, the
office should make the tax payers to maintain books of accounts and create awareness to taxpayers how to
determine tax liability of each taxpayers. Upgrading taxpayers‟ category should be based on stated rules and
regulation but not arbitrarily. Arbitration makes taxpayers not declare their income honestly to the revenue
office. The revenue office should organize and assign competent appeal and review committee which solves
dissatisfaction of taxpayers on the assessment audit by the office .Also the committee should be competent in
the area of assessment and audit in particular and issue of tax in general. Moreover, the committee should be
well experienced and formed in line with tax law and be neutral /impartial in their decision and representation of
committee members should
ACKNOWLEDGEMENTS
The authors thank Bodit Town Administration Tax collecting authority branch office experts, officials and tax
payer‟s for providing all necessary data.
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Alemayehu Elda "Business Income Tax Collection performance Determinants of in
the Case of Boditi Town Revenue Branch Office, SNNPR,Ethipia "International Journal
of Business and Management Invention (IJBMI) , vol. 07, no. 08, 2018, pp. 35-46
Article
Full-text available
Tax compliance issue is a major problem in revenue generation by the federal government in African countries. In Ethiopia, tax mobilization was also the lowest among sub-Saharan African countries and main purpose of the research is to identify the factors influencing the behavior of tax payer’s on tax compliance in Dessie town revenue authority. The target population of the study was Business Class people which denotes as category “A” tax payers of Dessie town and a Sample of 330 business was taken using stratified sampling followed by random sampling from each stratum from the total population of 1898. The taxpayers were stratified into trade (retailer and wholesaler), service sector and manufacturing (process) according to their field of work or business. The primary source of data was used to collect five point Likert scale data through questionnaire and partake 92.12% (304) as response rate from the sample size. The results exhibited that factors like tax knowledge, perception of tax payer’s fairness in tax system and equity, the influence of referral groups (friends, relatives) and probability of revenue authority audit and government spending on tax collection were influenced the tax payer’s behavior on voluntarily tax compliance. Finally, the revenue office has to ensure understanding of tax knowledge by the tax payer, maintain the transparency of the tax system and equity, collected tax has to be spend wisely by the Ministry of Finance and Economic Development for the welfare of the society and infrastructural development of the country.
Article
Full-text available
Tax compliance issue is a major problem in revenue generation by the federal government in African countries. In Ethiopia, tax mobilization was also the lowest among sub-Saharan African countries and main purpose of the research is to identify the factors influencing the behavior of tax payer’s on tax compliance in Dessie town revenue authority. The target population of the study was Business Class people which denotes as category “A” tax payers of Dessie town and a Sample of 330 business was taken using stratified sampling followed by random sampling from each stratum from the total population of 1898. The taxpayers were stratified into trade (retailer and wholesaler), service sector and manufacturing (process) according to their field of work or business. The primary source of data was used to collect five point Likert scale data through questionnaire and partake 92.12% (304) as response rate from the sample size. The results exhibited that factors like tax knowledge, perception of tax payer’s fairness in tax system and equity, the influence of referral groups (friends, relatives) and probability of revenue authority audit and government spending on tax collection were influenced the tax payer’s behavior on voluntarily tax compliance. Finally, the revenue office has to ensure understanding of tax knowledge by the tax payer, maintain the transparency of the tax system and equity, collected tax has to be spend wisely by the Ministry of Finance and Economic Development for the welfare of the society and infrastructural development of the country.
Article
Part I: EXPLORING THE TAX ENVIRONMENT. 1. Types of Taxes and the Jurisdictions That Use Them. 2. Tax Policy Issues: Standards for a Good Tax. Part II: FUNDAMENTALS OF TAX PLANNING. 3. Taxes as Transaction Costs. 4. Maxims of Income Tax Planning. 5. Tax Research. Part III: THE MEASUREMENT OF TAXABLE INCOME. 6. Taxable Income From Business Operations. 7. Property Acquisitions and Cost Recovery Deductions. Appendix 7-A Midquarter Convention Tables. 8. Property Dispositions. 9. Nontaxable Exchanges. Part IV: THE TAXATION OF BUSINESS INCOME. 10. Sole Proprietorships, Partnerships, LLCs, and S Corporations. 11. The Corporate Taxpayer. Appendix 11-A Schedule M-3 for Reconciling Book and Taxable Income. 12. The Choice of Business Entity. 13. Jurisdictional Issues in Business Taxation. Part V: THE INDIVIDUAL TAXPAYER. 14. The Individual Tax Formula. Appendix 14-A Itemized Deduction Worksheet. Appendix 14-B Federal Transfer Tax Rates (2009). 15. Compensation and Retirement Planning . 16. Investment and Personal Financial Planning. Appendix 16-A Comprehensive Schedule D Problem. Appendix 16-B Federal Transfer Tax Rates (2009). 17. Tax Consequences of Personal Activities. Appendix 17-A Social Security Worksheet. Part VI: THE TAX COMPLIANCE PROCESS. 18. The Tax Compliance Process.
This study builds on the work of Tsakumis et al. [Tsakumis, G. T., Curatola, A. P,. & Porcano, T. M. (2007). The relation between national cultural dimensions and tax evasion. Journal of International Accounting, Auditing and Taxation, 16, 131–147] by conducting further empirical analysis of the relationship between Hofstede's [Hofstede, G. H. (1980). Cultures consequences: International differences in work-related values. Beverly Hills, CA: Sage Publications] cultural dimensions and tax evasion across countries using multiple measures of tax evasion to gain additional evidence on the subject. Moreover, this study extends the preliminary international tax evasion model developed by Tsakumis et al. [Tsakumis, G. T., Curatola, A. P,. & Porcano, T. M. (2007). The relation between national cultural dimensions and tax evasion. Journal of International Accounting, Auditing and Taxation, 16, 131–147] to examine, along with culture, the impact of legal, political, and religious variables on tax evasion across countries. Based on data from 47 countries, and after controlling for economic development, the regression results indicate that the higher the level of uncertainty avoidance and the lower the level of individualism, legal enforcement, trust in government, and religiosity, the higher is the level of tax evasion across countries. These findings remain robust to multiple measures of tax evasion. Government policymakers should find the results of this study useful in assessing the likelihood of tax evasion from cultural, legal, political, and religious perspectives, and in developing tax reform policies to reduce tax evasion.
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Bhaita, HL (1976) Public Finance (5th Ed) Vikas publishing House, New Delhi
improving Tax Administration: A case study of the Uganda Revenue Authority
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Kagave(2005) improving Tax Administration: A case study of the Uganda Revenue Authority, Journal of African law, (145-176)
public finance and Expenditure in federal system
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Hirsch, W.and Anthony, M(1990), public finance and Expenditure in federal system, 2nd edition: Harcourt,.1990, USA
Public finance (19th Ed) vikas publishing house
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Bhaita, HL(1998), Public finance (19th Ed) vikas publishing house, New Delhi
Berhanena selam enterprises
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Addis Ababa. Berhanena selam enterprises
Taxation and Tax reforms in developing countries: illustration from sub-Saharan Africa chr
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Fjeldstand, o.and Ranker, L.(2003), Taxation and Tax reforms in developing countries: illustration from sub-Saharan Africa chr. Michelsen institut, Bergen, Norway.
Business Income Tax Collection performance Determinants of in the Case of Boditi Town Revenue Branch Office, SNNPR,Ethipia
  • Taro Yamane
Yamane, Taro. (1967). Statistics: An Introductory Analysis, 2nd Edition, and New York: Harper and Row. Alemayehu Elda "Business Income Tax Collection performance Determinants of in the Case of Boditi Town Revenue Branch Office, SNNPR,Ethipia "International Journal of Business and Management Invention (IJBMI), vol. 07, no. 08, 2018, pp. 35-46