ASSESSMENT OF CATEGORY “C” TAX PAYER COMPLIANCE WITH TAX LAW (IN CASE OF GUBRE TOWN)

Abstract

Tax compliance behavior among taxpayers is influenced by multiple factors, and understanding these Assessments is crucial for building effective tax systems that encourage voluntary compliance. This study assessed the voluntary compliance behavior of Category "C" taxpayers in Gubre Town, Central Ethiopia. Both primary and secondary data were used. A descriptive research design was employed, integrating both quantitative and qualitative approaches. A stratified proportionate random sampling technique was used to select 90 taxpayers from four major business activity categories, ensuring proportionate representation. Additionally, 10 tax authority employees were included using a census method. Findings indicated that taxpayer knowledge, perceived fairness of the tax system, service satisfaction with the tax authority, and trust in government significantly influence voluntary compliance. Many taxpayers perceived their tax liabilities as unfairly high relative to their ability to pay, and a significant portion expressed low awareness of tax laws. Organizational weaknesses in service delivery and communication were also identified. The study concludes that enhancing taxpayer education, ensuring fair and transparent tax assessments, and strengthening tax authority service delivery are crucial for improving voluntary compliance. It is recommended that tax authorities implement targeted awareness campaigns, revise assessment methods to better reflect taxpayer realities, and foster public trust through transparent and responsive tax administration.