Determinants of tax collection performance on category "B" in case of Sheka Zone Revenue department South west Ethiopia.

Abstract

Tax collection plays crucial and significant role in raising revenue to the level required for economic growth and development for both local as well as national government. The main objective of this study was to examine the determinants of tax collection performance on category B in case of Sheka zone revenue Department. To achieve the objectives, descriptive and explanatory research design and mixed (qualitative and quantitative) approaches were employed. To conduct this study primary were gathered through self- administrated questionnaires, semi-structured interview and secondary data from five (2019 to 2023) years Sheka zone revenue department repots. The data was collected from 99 respondents of category B taxpayers selected through stratified and simple random sampling techniques and an interview conducted from 10 purposively selected tax employees. The gathered data was analyzed by descriptive and inferential statistics through ordered logistic regression model by using SPSS version, 27software. The finding of the study was tax knowledge, tax compliance, simplicity of the tax system, fairness, organizational strength and penalty have positive and significant effect on tax collection. On other hand, tax evasion and political instability have negative effect on tax collection performance. The researcher recommended that tax knowledge and tax compliance of taxpayers, have a vital role on tax collection therefore, the Sheka zone revenue department and each tax office should give emphasis on creating awareness of taxpayers more than just doing before. Provide continues training to taxpayers that reduce intentional or unintentional breaking of laws, wrong attitude of taxpayers and reward loyal taxpayers. In addition, informing taxpayer’s obligation by using media opportunities to improve their tax collection performance. Finally, further studies should fill the gap by applying different research model to enhance the accuracy of the result.