Abstract:
This study was focused particularly on identifying and assessing the problems in association
with the practice of VAT at Jimma Zone Revenue Authority. To achieve this objective, the
researcher used primary and secondary data. The researcher used questionnaires, interviews
and relevant documents to gather primary and secondary data from the data sources. Pie charts,
graphs, table, Percentages were used in analyzing the collected data. VAT practice in Jimma
Zone has faced different confronts. The main problems that encountered are: misunderstanding
of the public in general and business community in particular regarding the VAT laws,
resistance against registrations for VAT by some traders, administration inefficiency, and
provisions of understated financial statements. All these constraints hinder the smooth practice
of VAT and achieve the desired objectives as possible. On the basis of these findings, the
researcher recommends that the authority should train the taxpayers about the rules and
regulations of VAT continuously, recruiting new employees and give nonstop training for the
existing once, it should also increase its follow-up and investigation to control refusal
enterprises, as well as effectively and efficiently performing the tasks of identification of VAT
taxpayers, processing of returns, controlling collections, auditing taxpayers, recognizing
genuine taxpayers and levying penalties to tackle the problems it has encountered.
