| Abstract: | Tax is an important source of revenue for government’s spending and development
projects. The main objective of this study was to examine the determents of voluntary
tax compliance of the tax payer’s at Addis Ababa city administration tax office. The
study adopted a quantitative research approach to test the hypotheses and answer
research questions. The data was collected from category A and B tax payer’s Addis
Ababa city administration tax office. Two analysis methods were used; descriptive
statistics and inferential statistics to examine significant determinant factors of
voluntary tax compliance using statistical package for social science (SPSS). The
result founds that majority of tax payers were compliant. It was also found that
Government expenditure negatively affects voluntary tax compliance. Tax audit,
Referral groups, and Personal financial status positively affect voluntary tax
compliance. Tax knowledge, Service delivery of tax office, Penalties and fines, and
Equity and fairness were found insignificant. The study suggests to the tax office
create awareness on importance of government spending, tax laws, availability and
amount of penalties and fines on tax evasion and late declarations. The study also
advices the tax office to work on service delivery system (training workers, using
appropriate technologies, etc. ) in order to improve efficiencies of its workers dealing
with taxpayers. The study suggests, further investigations on this and related topic to
be done, which helps to analyze these and other factors from different perspectives. |
