Tax is compulsory levy imposed on property by government to provide security and create conditions for well-being of society and it is a key player in every economy of the world today. In most developing economies taxation goes hand in hand with growth of their economy as it is vital to provide services for long-term investments in public goods. Understanding determinants of tax administration is essential to design suitable tax policy to improve its performance. This study was done with the objective to examine determinants of tax administration among category “A” and “B” tax payers in Bench Sheko zone. To meet its objective, the study used cross sectional data that were collected from 288 sample tax payers while the non-response rate was 2.7%. The sample respondents were selected using stratified random sampling proportionally. Besides, for the purpose of triangulation of the data 7 KII were carried out with employees of tax offices both in woreda and town administration. Descriptive statistics and binary logistic regression method were applied for analysis of collected data. The finding of the study revealed that out of 8 explanatory variables included in the mode; Education Level of tax payers (EDUL), Complexity of Tax System (CTS), Audit Effectiveness (AUDE), Fairness of tax (FAR), Service Delivery of tax authorities (SD) were found statistically significant at less 5% in determining performance of tax administration in the study area. Thus, providing apt and adequate education to taxpayers, prompting fairness of tax in the study area, ensuring audit effectiveness, improving quality of service delivery, and easing tax system for payments by capacity building had been suggested for tax authority and when this is done, it will lead to boost performance of tax administration in the study area there by improving the overall quality of tax administration.
Published Date: 2023-03-24; Received Date: 2022-12-22