Compliance Cost of Individual Income Tax Payers in Addis Ababa
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Date
2011-06
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Addis Ababa University
Abstract
The paper examines the tax compliance costs of the individual taxpayers in Addis Ababa.
One research question and one hypothesis were investigated in this study: (RQ)
compliance costs of the individual income tax system borne directly by the taxpayers
themselves, including both the time spent and pecuniary expenditures and (H) The
compliance costs of individual income tax are relatively low - in terms of their costs per
individual: especially costs of time and monetary costs. The survey was conducted to a
total of 170 individual income tax payers and questionnaires were distributed to those
individual taxpayers in the administrative city of Addis Ababa in Ethiopia. A total of 103
useable responses were received and used for the final data analysis. The findings from
the survey provide pertinent and useful insights about the compliance costs of Addis
Ababa individual taxpayers. The results of the study indicate that the highest time spend
was on learning tax rules. The average values per tax payers were 168.83 ETB and the
average times spent by tax payers for filing their tax return were 5.17hrs. In all, the study
found that the compliance costs of individual taxpayers in Addis Ababa were relatively
low in term of the total monetary value
Keywords: compliance cost, income tax, Addis Ababa
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Keywords
Compliance cost; income tax; Addis Ababa