Abstract:
Government revenue in the form of tax is the main fisical policy tool to finance domestic growth
and to bring about desired level of economic stability. This study was conducted with the
objective to investigate determinants of tax revenue in Jimma Zone with particular emphasis in
Jimma City Administration among category”A” and “B” tax payers. To these end, the study
made use of cross sectional design, and 223 sample respondents(tax payers)were selected using
proportionate stratified random sampling approach. Of these respondent about 66 were category
“A”, while the remaining 157 were category “B” tax payers. Both descriptive statstics and
econometric tool of analysis were employed for the analyis. A Binary logistic regression
methodology was applied as an econometric tool to analyise the data. The finding of the study
revealed that out of explanatory variables included in the model age (Age), education level
(EL), tax audit practice (TA), tax fairness (TF) and tax payers’ knowledge (TPK) were found
positively significant at 5%, in influencing revenue, while social and economic instability (SEI)
and tax system complicity (TSC) reaveled negative and significant result at 5% level of
significance in infulencing performance of tax revenue in Jimma city revenue adminstration. Yet,
tax payer personal financial ability (TPPFA) and service delivery of tax authority (SDTA)
generated insignificant effect. Based on the findings, tax pudit practice is effective in generating
paramount of revenue for the city revenue adminstration. Thus, increasing tax pudit practice
would enable city revenue administration to sustain generation of revenue from its tax payers.
Besides, ensuring tax fairness, giving a contined traning to tax payers’ to empower their tax
knowledge and level of understanding had better been suggested as the focus area by the city
revenue administration and when this is done, it will lead to a higher revenue performance.
