Assessment of Factors Affecting the Value-Added Tax Collection Performance in the Case of Gullele Sub-city, Addis Ababa, Ethiopia
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Date
2024-03-13
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
AAU
Abstract
Recently, Value Added Tax (VAT) has become a major worldwide tax instrument
which enhances economic growth, and it has a significant factor in increasing
government revenue, which funds expenditures. However, governments have
addressed many obstacles to ensure effective tax collection. The study aims to assess
the factors affecting the Value-Added Tax (VAT) Collection Performance, in the case
of the Gullele sub-city, Addis Ababa Ethiopia. In doing so, the study evaluates the
VAT collection performance factor in more detail. Both qualitative and quantitative
research methods were used to collect and analyze primary and secondary data for
the study. Self-administered questionnaires to the branch office employees were used
to collect primary data. The target populations of the study were the staff members of
the Gullele sub city small scale taxpayer’s branch office. In the branch office there
were 32 total workers in the taxation department who were directly involved in VAT
collection and administration. The study used purposive and convenient nonprobability
sampling
technique.
Accordingly,
the
total
sample
size
considered
by
the
researcher
was 30. Descriptive Survey data analysis method used, and STATA 14
were used for the quantitative analysis. Furthermore, secondary data was gathered to
assess the factors that affect the VAT collection performance. The lack of advanced
technology, the low number of registered VAT payers and those who announced their
VAT return with payment, the inadequate capacity-building and training programs
for tax officials and staff, and other tax administrative practices are the main causes
of the low performance of VAT collection. The study concluded by recommending the
use of cutting-edge technology, ongoing staff capacity building, proper intention for
the planning of VAT collection, hiring the necessary workforce, enhancing consumer
and VAT payer awareness, and increasing the number of VAT payers to increase the
performance of VAT in Ethiopia. It also needs the government’s and citizens' due
attention, and the concerned body may take the findings worthwhile for corrective
action.