Abstract:
Tax is defined as a way in which governments finance their accrued expenses by administering charges
on the residents and businesses located within the country. This research examined the determinants of
tax collection efficiency in Ministry of Revenue Large Tax Payer’s Branch Office at Addis Ababa. To
achieve the objectives of this study explanatory research design was used. Data was collected through
questionnaire from a sample of 265tax payers that were selected using simple random sampling method
and interview for the middle level management and tax officers of Ministry of Revenue Large Tax
Payer’s Branch Office using purposive sampling. The data collected from the questionnaire were
analyzed using statistical tools such as mean, standard deviation, correlation, and multiple regression
analysis. The finding of the study indicates also that employees were most moderately agree with the tax
compliance, tax payer’s awareness, tax exemptions dimensions of tax collection efficiency. On the
contrary, respondents of taxpayerswere agreed with Tax office Capacity. The five determinants of tax
collection efficiency dimensions (tax office capacity, tax compliance, taxpayer’s awareness, and tax
exemptions) have positive and significant effect on tax collection efficiency. Furthermore, the
aforementioned determinants of tax collection efficiencydimensions significantly contribute 27.2% to tax
collection efficiency. Based on the findings of the study, the researcher forwards sound recommendations
including that tax collection efficiency should start analyzing the organization for better organization
achievement and meeting the expected goal of the organization.
