Rental income tax practice and its contribution to revenues of city administration in the case of jimma town

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