Abstract:
The objective of this study is to identify factors leading tax payers to engage in tax evasion in
the case of Bench Sheko Zone Category “B” Tax payers. Descriptive and Explanatory
research design was used in this study. Questionnaire and document analysis was used to
collect data. The participants of the study were 201 tax payers selected from one town
administration and five woredas. Multiple linear regressions were the model used to explore
the relationship between independent and dependent variables the impact of explanatory
variables on dependent variable. The quantitative data were analyzed by descriptive and
inferential statistics. The finding of the study shows that zonal performance of tax collection
of the selected years was found to be in between 61.32% to 79.90. % This indicates the trend
of tax collection is increasing but its rate of increment is very low which indicate there is tax
evasion in the research study area. The five years zonal level detected tax evasion was
29,246,506 Birr with trend of increasing tax evasion from year to year. Therefore, Zone and
Woreda revenue collectors and administration must use the tax revenue effectively for public
infrastructure provision, control the expending of tax revenue to not wind up in some
corrupted politicians pockets, and must transparently announce its expenditure to tax payers.
