The Effects of Digital Tax Administration Systems in Enhancing Taxpayer Compliance; Evidence from Federal Ministry of Revenue in Addis Ababa
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Date
2026-01-01
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Addis Ababa University
Abstract
This study investigated the effect of digital tax administration system features on tax compliance of federal taxpayers in Addis Ababa, Ethiopia. It focused on six key dimensions: system usability, technological literacy, perceived trust, training and support, perceived benefits, and enforcement visibility. An explanatory research design was employed to examine the causal relationships between these variables and compliance behavior. Primary data were collected through structured questionnaires administered to sample 385 respondents selected from both category A and B taxpayer population. A mixed sampling method was employed, which included the simple random and convenience sampling methods. Descriptive statistics, correlation, and multiple regression analysis were employed to test the hypotheses. Overall, the results indicate that the issue of system functionality, especially usability and support, is more significant in influencing compliance than the concept of trust or deterrence. This is further evidence that taxpayers in Ethiopia are most likely to respond to systems that are functional and user-friendly, with responsive support. On the other hand, this research also has implications in the theoretical development of digital governance and taxpayer behavior in developing countries, as it proves that compliance is less influenced by institutional attitudes and more by utility. In this regard, the implications are clear, and it is imperative that efforts be made to improve digital tax systems and service delivery, as well as promote voluntary compliance through user-centric initiatives to improve Ethiopia’s revenue systems and overall public sector transformation.
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Keywords
Taxpayer Compliance Behaviour, Digital Taxation, Enforcement Visibility, Perceived Benefits, System Usability, Technological Literacy