Tax fairness and its impact on compliance behavior of category “c” tax payers in south west Shewa in case of woliso town

Abstract

This study investigates the tax fairness of south west Shewa in case of woliso Town category “c” taxpayers and its impacts on compliance behavior, together with other variable. A theoretical framework was developed based on the equity, distributive justice, and procedural justice theories. The study adopted a mixed method research approach to test the hypotheses and answer research question. The data it well be collected from 364 business profit taxpayers of which through distributing of self-administered questionnaires and in-depth-interview. The latest statistical package (SPSS) software, correlation and regression analysis, were used to analysis the survey and thematic analysis was applied to in-depth interviews. The results of this combined research methodology suggest that Woliso Town business profit taxpayers perceive positively in respect of vertical, exchange, procedural fairness and horizontal fairness on the prevailing business profit tax system. With regard to tax knowledge and complexity, the finding of the paper showed that, the taxpayers did not have sufficient knowledge and there were no easily understandable and vague procedures of the business profit tax system. Finally the thesis suggests a series of measures, which could be taken by the government in general, and tax authorities in particular; improving policy and administration issues, educating the taxpayers and conducting awareness creation and consultation sessions, and providing all necessary social service to the public, as well as maintaining the tax system fair and equitable