The aim of this study was to identify factors affecting the Value added tax collection performance in West Shewa Zone. The specific objective the study was to identify Tax payer’s related factors affecting VAT collection Performance, to identify Tax administration related factors affecting VAT collection performance and to evaluate Consumers related factors affecting VAT collection Performance and in selected areas. The study used mixed approach qualitative and quantitative research methods to collect and analyze both primary and secondary data. Secondary data were collected from reports and published articles. Regarding to primary data, it obtained from structured questionnaire that were collected from 166 VAT registrants samples and 124 were collected from revenues authority employees generated by using Yemane formula. These samples were selected by using stratified sampling techniques and 105 were collected questionnaires from consumers and 8 head department for interview was conducted. Descriptive statistics and econometric models through multiple linear regression models were used with the help of SPSS version 20 and STATAs version 14 statistical software. This study found Tax payers; Revenues Authority employees and consumers related factors affect the performance of value added tax collections in study areas. The Results of the study showed that Tax knowledge, Tax registrants and introduction to technology were positively influenced Value added Tax collection performance whereas Tax Evasion and Tax non-compliance variables were negatively affected Value added Tax collection performance for tax payer and statistically significant. Whereas Technical staff competence, VAT audit, VAT assessment and VAT rate variables were positively influenced Value added Tax collection performance and political pressure variable negatively affected Value added Tax collection performance for Revenues Authority employees variables and statistically significant. This study recommends that the government and Revenues Authority should take corrective action on Tax payers who perform Tax noncompliance. Revenues Authority should fulfill adequate man power and registered VAT Tax payers who fulfill the criteria but not registered to increase VAT Collection performance. Also Revenues Authority must assess VAT and audit VAT on time to increase VAT collection and eliminate tax noncompliance.
Citation: Negasa K.A. (2022) Factors Affecting Value Added Tax Collection Performance in West Shewa Zone, Oromia Regional State, Ethiopia, European Journal of Business and Innovation Research, Vol.10, No.8, pp.,39-81
Keywords: Employees, Performance, Value Added Tax, revenue authority, tax payers
