| Abstract: | This study examines the effect of tax audit on revenue collection evidenced from ARB Merkato no.2 branch office. In doing so, tax audit is measured by seven variables (tax audit resources, audit case selection, capacity of auditors, tax protection system and, tax automation, and amount before and after audit). The study uses explanatory research design and mixed research approach with secondary data utilized over the study period 2009-2018G.C (10 years). The data were collected both from primary and secondary source of data. More specifically, the study adopted a multiple regression model. The finding of the study reveals that, revenue protection system, and audit case selection has positive and significant effect on revenue collection and statically significant at 5% and 1% significance levels respectively. Furthermore, revenue after audit, auditors’ capacity and tax automation has positive and insignificant even at 10 present significance levels .Apart from this, the variable tax audit resource and before audit amount has a negative effect on revenue collection and statically significant at 5% and 1% significance levels respectively. From the finding of the study the researcher can concluded that; tax audit found the significant variable which affect revenue collection performance at ARB, Merkato no.2 branch office. This study suggests that the management of Merkato no.2 branch office shall improve tax audit resources by considering the recommendation given from these research findings to increase revenue collection. |
