Determinants of Taxpayers' Voluntary Compliance with Taxation the Case Study of Dire Dawa City

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Improved tax compliance boosts the revenues available for supporting public services without increasing the current tax burden on compliant tax payers. There appears to be a trend in tax compliance policies with initiatives by a number of tax authorities to move towards a more taxpayer focused approach. A number of tax authorities have been moving towards a more sophisticated approach to tax compliance. Traditionally there seems to have been an assumption that tax compliance can be ensured with the help of legal enforcement and penalties. These days this is ceasing to be the case, as the taxpayers are demanding more assistance and fair treatment from the tax authorities. Even there seems to have been a shift in attitudes towards treating the taxpayer less as a passive donor who simply has to be billed for taxes due and more as a customer sometimes requiring particular forms of assistance and support. The voluntary compliance behavior of the taxpayers is determined by various factors and identifying these factors and treating them accordingly should be the central premises of any tax system in order to maintain voluntary compliance at satisfactory levels. This study was meant to identify the determinants of taxpayers ' voluntary compliance in Dire Dawa city. Based on this fact the necessary data were collected using standard questionnaire and analyzed According to the response of the respondents, certain factors were found to be the determinants of taxpayers' voluntmy compliance. These are, tax fairness and equity, organizational strength of the tax authority, awareness level of the taxpayers, sociocultural factors, and provision of social services by the government. Finally, based on the findings possible recommendations were given. These include, maintaining tax fairness and equity, building capacity of the tax authority, conducting extensive awareness creation programs, and providing social services to the general public.



Compliance with taxation, Determinants of taxpayers'