Abstract
The study was conducted to investigate the determinant factors of Value Added Tax collection performance in West Shoa Zone by giving emphasis on three selected districts i.e. Ambo city Revenues Authority, Dandi and Bako woredas Revenues Authority’s. The researchers used cross-sectional data covering a period in 2017. Since the data was survey in nature the researcher used both qualitative and quantitative (Mixed) research approaches to achieve objective of the study. The researchers used purposive and stratified sampling method to take a sample of Tax payers, Consumers and Revenues Authority Employees. Descriptive statistics and multiple regressions were used to analyze primary and secondary data to reach the result of the study using Statistical Package for Social Science (SPSS) version 20. The result of the study showed that Tax payers awareness on Value added Tax, Tax payers’ maintenance of account and Value added Tax Rate have positively influenced Value added Tax collection performance whereas Tax Evasion, Tax avoidance and Tax non-compliance variables have negatively affected Value added Tax collection performance for tax payers. The study results also showed that Value added Tax Assessment, Value added Tax Audit, Competence training, Adequate manpower, Tax payers identification and Penalization variables have positively influenced Value added Tax collection performance whereas External Legal Environment variable negatively affected Value added Tax collection performance for institutional variables. Thus, it’s recommended that Revenues Authority should fulfill necessary manpower and create continuous follow up in order to improve Value added Tax collection performance. Keywords: Value added Tax, Tax avoidance, Tax Evasion, performance, Tax payers DOI : 10.7176/RJFA/10-21-06 Publication date: November 30 th 2019
Highlights
Value Added Tax (VAT) is a tax on the value added to goods and services by enterprises at each stage of the production and distribution processes
Both descriptive and inferential statistics were used to analyze data. Descriptive statistics such as Pie charts, column chart, table, Percentages were used and inferential statistics used to diagnostic test
The findings show that when frequency of VAT Assessment increase, VAT collection performance increase by
Summary
Value Added Tax (VAT) is a tax on the value added to goods and services by enterprises at each stage of the production and distribution processes. It arises whenever a “taxable person” makes a “supply of goods or services” in the course of his business. Since 1979 VAT has been adopted as the main form of an indirect tax by many countries in different parts of the world. Multi stage sales tax which is imposed at more than one level of production and distribution has replaced sales tax for reasons of administration and simplicity. Multi stage sales tax which is imposed at more than one level of production and distribution has replaced sales tax for reasons of administration and simplicity. (Hailu, 2004)
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