Factors Affecting Tax compliance Behavior of Addis Ababa Number Two Medium Taxpayers Branch Office in Addis Ababa, Ethiopia

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title


Addis Ababa University


Taxation is one of the important elements in managing national income. However, as most of the developing countries, Ethiopia has been highly depending on external aid and loan for funding its expansion events. The tax involvement to GDP remained consistently low and is relatively reduction due to low tax compliance. The main objective of this paper is to insight the influence of some possible factors that affect the compliance behavior of Addis Ababa medium tax payers in Addis Ababa. The data required for this research was collected from primary sources which were collected directly from taxpayers through researcher-administered questionnaire .In addition, the research employed quantitative research design. A sample size of 303 was drawn from the tax population in Addis Ababa medium taxpayers branch office. Generally, the research signifies that the factors which make taxpayers not discharge their tax duties with their own self-assessment and right amount. The research implies that the researcher’s selected factors; perceived fairness of tax system, tax knowledge and education, fine and penalty and power and trust of the tax authority the taxpayers are have impact on the tax compliance level. The city tax authority has to do a lot tasks to build strong and trustful relationship between the tax authority and the taxpayers. The tax authority should supposed provide continuous education for the taxpayers for creating clear awareness the use tax for the citizens. Besides, there should be rigid enforcement of fines and penalties to deter tax evasion. The tax authority has not provided sufficient awareness with its directives and laws. The tax system, tax policy and tax proclamations should extract by considering the taxpayers’ knowledge level, income level and perception.


A Thesis Submitted to AAU, College of Business and Economics, department of Accounting and Finance in partial fulfillment of the requirements for the degree of masters of Science in Accounting and Finance (MSC)


Tax, Tax Payer