Determinants of Tax collection performance: Study on category “A” taxpayers in Sheka Zone

Abstract

Developing countries governments try to build modern tax system. However, many of these developing countries face challenges with collecting taxes effectively and also with taxpayers’ negative feelings to words paying tax. The purpose of this study was to determine tax collection performance with regard to category “A” taxpayers found in sheka zone. To accomplish objectives, the researcher used descriptive and explanatory types of research design and both primary and secondary data collection techniques were adopted. The study employed both qualitative and quantitative approaches to conduct this research. From 5 woredas two woredas, one city administration and zone revenue authority were selected. The study used Yamane formula to select representative sample from entire population. The study used the response from 203 respondents from category A tax payers and employee in revenue authority office. Five year (2010-2014) data has been collected from secondary sources and also primary data were collected through questionnaire. The researcher used both questioner and interviews to collect data for research. All collected information was analyzed by using both descriptive, multiple liner regression models. Data obtained from respondents were entered into SPSS software application for analysis. For this study, six independent variables identified including tax planning, tax law, training and awareness of tax payers, inflation rate, experience of tax collectors and employee qualification. Therefore, based on output of SPSS all independent variables have affects tax collection performance significantly. Therefore, the zonal tax collection plan was not fully collected, VAT registered tax payers were dishonest, engagement of taxpayers in tax evasion, weak tax law implementation poor training and awareness of tax payers and employee qualification were a major finding of the study. Then, the researcher recommended that sheka zone revenue authority should understand the contributions of these six variables to poor tax collection performance.