Assessment of VAT (value added tax) Administration in Federal Democratic Republic of Ethiopia Ministry of Revenue Medium level Taxpayers Branch Office
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Date
2024-01-15
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Publisher
AAU
Abstract
The general objective of this research assesses value added tax administration specifically
addresses: effectiveness and efficiency of tax administration, problems of VAT
administration, attitude of taxpayers and type of system. To achieve this objective, the
researcher used both qualitative and quantitative descriptive research designs and a sample
of employees and tax payers of the authority were selected using a random sampling
technique among the probability sampling methods. From 3426 tax payers and 358
employees samples were selected whose activity is directly related. The researcher used
questionnaires, Interviews and relevant documents to collect primary and secondary data
from the branch by reviewing documents from annual reports. Graphs, table, Percentages
were used in analyzing the collected data (findings). Secondary data were obtained from
the; audit, enforcement and refund performance reports of the branch. Tables, percentages
and graphs were used for data analysis. The Statistical Package for Social Sciences (SPSS)
version 26 was the tools used for quantitative data analysis. From the outcome of the study
the major obstacles that hinder VAT Administration are low rate of voluntary compliance,
lack of taxpayer’s awareness, shortage of audit and refund process, and affect the follow-up
and controlling activities, relatively low rate of audit and enforcement, and late payment
system. The paper suggests that in Federal Democratic Republic of Ethiopia Ministry of
Revenue Medium Level taxpayers’ branch office, attempting to implement what is
legislated in the main areas deserves the Government’s due attention. The study also
emphasizes the need to strengthen the administration capacity in general and the VAT
administration system in particular as efficiently as possible. The outcomes of the research
showed lack of tax awareness among the society and strong education programs as well as
lack of trust between taxpayers and administrators as major challenges to the VAT system
in the country. Therefore, the researcher recommended developing taxpayer’s awareness to
increase voluntary compliance, refund process and strengthen audit and enforcement
capacity of the Federal Democratic Republic of Ethiopia Ministry of Revenue Medium
Level taxpayers’ branch office.