Determinants Of Tax Collection Efficiency: The Case Of Ministry Of Revenue Large Tax Payer’s Branch Office

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.