Tax Payers’ Perception Towards the Existing Tax System in Ethiopia: The Case of North Shewa Zone, Ethiopia

Yalemselam Worku

doi:10.7176/rjfa/10-3-03

Abstract

The objective of this study was to examine taxpayers’ perception towards the excising tax system in Ethiopia in general and North Shewa Zone, Amhara Regional State in particular. The study used descriptive research design. Category “B” tax payers were the target population of this study. A sample of 317 individual Category “B” tax payers were randomly taken from selected cities and woredas of North Shewa Zone, Amhara Regional State. Both primary and secondary data sources were used for the study. Primary data were collected through questionnaire and secondary data were collected from reports and manuals of the Ethiopian Revenue and Customs Authority (ERCA) branch offices. Descriptive statistics such as tables and percentages have been used for data analysis. The result of this study revealed that North Shewa Zone Category “B” individual taxpayers' perceive the tax they are paying is unfair. Moreover, most of the respondents' point out the complexity of the tax system. Generally, the result of the study showed the importance of taking measures to improve the existing tax system through developing simple and transparent tax collection systems, building trust and confidence with taxpayers' to increase the positive perception of taxpayers' towards the existing tax system. Keywords: Tax fairness, Tax complexity, North Shewa Zone, and Ethiopia DOI : 10.7176/RJFA/10-3-03

Highlights

Tax is an important source of government revenue to finance expenditures on goods and services that can help to create employment, fight inflation and stimulate economic growth
As in all other countries, one of the purposes of taxation in Ethiopia is the raising of as much revenue as possible to meet the ever increasing public expenditure for the supply of public goods and services which otherwise would not be available to the general public by the market (Yohannes & Sisay, 2009)
The following section presents the perceptions of different tax payers which are participated in the questionnaire and a conclusion was drawn based on the information gathered

Summary

Introduction

Tax is an important source of government revenue to finance expenditures on goods and services that can help to create employment, fight inflation and stimulate economic growth. As per the researcher’s knowledge, no study is conducted to examine the taxpayers’ perception towards the existing tax system in relation to tax fairness and tax complexity simultaneously.

Objectives

Results

Conclusion