The impact of tax audit on improving the compliance of tax payer: the case of jimma city administration revenue authority office

Abstract

The major objectives of this study was impact of tax audit on improving The compliance of tax payer a case study of Jimma city administration revenue authority office .The study specifically sought the effect of Probability of being tax audit, perception of government spending, Fairness, Attitudes, awareness, fines and penalties and tax education on tax compliance in Jimma city administration revenue authority office. To achieve objective of the study, both qualitative and quantitative research methods were employed. Data was collect using questionnaire, interviews and both primary and secondary data were used. The Sample of respondents were selected for the study was all tax audit staff member. As the number of tax audit staff are limited in number a census was adopted to include all 65 tax audit staff member in the study. Those tax audit staff member was 65 employees selected a census all of tax audit staff members in Main Office and sub cities, including quality controllers And Head managers of Main office and three sub cities Descriptive statistical tools and multiple linear regressions analysis were used in analyzing the data collected. The study findings showed that probability of being tax audit; tax education, tax fairness, tax payer attitudes and awareness have positive effect on level of tax compliance. Similarly, fines/penalties and perception of government spending have positive effect on level of tax compliances. The study provides some preliminary evidence that probability of being tax audit, imposing fines/penalties and provision of tax education, fairness, attitudes, awareness and perception of government spending will improve tax compliance. Key recommendations of the study include: regard to Education; effective probability of being audited; to educating the tax payers and improving thoroughness of audit, educating the taxpayers and conducting awareness creation, and It has to work also making the whole tax system as fair as possible with regard to the benefits received for paying the tax and the tax burden of paying it. a government must will have change attitudes of tax payers by educating them and by change of tax payer outlook about tax and the government must have wisely spending for the national revenue, for example for basic facilities like education, health and safety and public transportation.