Assessment of Tax Audit Practices and its Effect Case Study in Ministry of Revenues Large Taxpayers’ Branch Office
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Date
2023-12-04
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A.A.U
Abstract
One of the main objectives of the Ethiopian Ministry of Revenues is to generate adequate tax
revenues towards finance ever increasing public expenditure on poverty alleviation and
development projects; this would be achieved through streamlining of the tax administration.
The failure to collect all potential revenue could be linked to poorly administered tax system.
Tax audit can play a major role in improving tax administration and overall taxpayer
compliance by impacting on taxpayer behavior; hence the purpose of this study was to assess the
tax audit practice of large taxpayers’ Branch Office of the Ministry of Revenues of Ethiopia
regarding Audit Selection methods, Types of Tax Audit, Examination techniques and audit
workforce capabilities. The techniques used in the study include survey with tax auditors, senior
tax auditors I & II and team leaders, in-depth interviews with the section head of tax audit and
department of risk management besides document analysis of the annual report of large
taxpayers’ Branch office were taken and those collected data were analyzed using descriptive
analysis. Finally the study reveal that among the factors that affect the collection of tax revenue
of a country, tax audit effectiveness plays a vital role on the side of tax authority of LTO which
minimize tax avoidance and evasion besides enhance and maximize revenue generation.