DETERMINANT OF EFFECTIVE TAX ADMINISTRATION SYSTEM IN GURAGA ZONE

Abstract

The best tax policy in the world is worth little if it cannot be implemented effectively. tax administration is the one that ensures high taxpayer’s compliance level. Nevertheless, measuring the effectiveness of the tax administration by the size of the tax collected is unsophisticated judgment. Therefore considering the tax payers equality treated are gap rather a much stronger criterion for the effectiveness of tax administration. Ethiopian revenue costume authority apply unusual estimating methods for hard -to -tax group’s viz. presumptive taxation to ascertain the tax liability of category ‘C’ taxpayers due to the corresponding administrative burden of auditing of such taxpayers. This study has attempted to identify the determinants that affect tax administration in Gurage zone selected werdas and city’s administration. Wire collected foremen Primary data collected from both revenue office employees and category ‘C’ taxpayers. By Proportionate Simple random sampling technique used and Descriptive and inferential statistics used to analyze the data. The study found that revenue office’s decisions have perpetuating phenomena in developing tax administration effectiveness among disfavored taxpayers, which was used as an indirect approach to measure the effectiveness of tax administration in this study., lack of tax education (tax awareness) ,lack of quality service delivery, lack of legal enforcement and attitude of tax payer towards tax the consequent of taxpayers, which showed the existence of the strong relationship between tax administration effectiveness and tax fairness and equity, tax law enforcement and attitude of taxpayer. The other cases studies, which showed the existence of this study tax awareness, and quality service delivery, are negatively in significant relation or has no relationship with the effective tax administration. Finally, the study recommends the revenue office to have fair treatment, active taxpayer’s education, secure high-quality service to citizens, enforce tax law and the taxpayer attitude toward tax, by strengthening professional level with training or advanced education, and ITC to improve tax collection.