Abstract:
The purpose of this paper is to analyze the rental income tax practice and its contribution
to revenue city administration. The main objective of the study is to explore the rental
income tax practice and its contribution by taking Jimma town revenue offices a sample
of the study. To undertake the study on this particular title used primary and secondary
data series data set that consists of ten years. The 142 rental income taxpayers were
selected from three sub-cities using systematic random sampling to fill the schedules and
returned 139 completed questionnaires were obtained. Besides, a personal interview has
been conducted with the collection managers and tax experts of the three sub-cities.
Descriptive statistics and SPSS analytical tool were employed to analyze and
presented using tables, graphs, frequency, mean and standard deviation of obtained
data. Based on the findings some possible recommendations were given. These include
rental income tax revenue contribution 1.09 to total tax revenue in the given period of
tenth years, the authority should focus on rental income tax, building an understanding of
taxpayers, upholding tax fairness and equity, constructing capacity of the tax authority,
and providing required social services to the general public to get trust from society and
critical follow up over taxpayers those evade tax by their problem. This study also
searches out most of the rental income taxpayers complain about the tax system plus the
tax collection mechanism of the authority also terrible. Even if the authority has been
doing well in creating awareness to the rental income taxpayers about the way rental
income tax was computed, time of payment and mode of payment, it lacks informing the
public about the rental income tax. Furthermore, the outcome also indicates the rental
income tax payers understate the amount they received from rental of buildings while
informing to the authority
