Determinants Of Tax Evasion In Addis Ababa City Administration The Case Of Bole Sub City Category A Taxpayers

Tax administration in Ethiopia, similar to other developing countries, is characterized by lowrntax compliance level. This has resulted in a reduction of revenue yields and public services.rnThe overall objective of the study was to identify determinants of tax evasion. Out of 1,625rnstudy population, 335 questionnaires were distributed to randomly selected-taxpayers in sevenrnstrata and 260 questionnaires were returned. The category “A” taxpayers were stratified intornimport, export, wholesaler trade, retail trade, construction, service sector and manufacturingrn(process). The primary data was collected through structured questionnaire from category “A”rntaxpayer of Bole Sub City Small Tax Payers Revenue and Customs Branch Office. The rawrndata was analyzed using descriptive and inferential statistics. The regression analysis showedrnthat tax rate, income level, probability of detection, penalty rate, complexity of tax system,rnperceived role of government, peer influence on tax evasion, age, gender and education factorsrnare statistically significant. The research also suggested that efforts to be made with regard tornrevising the perceived high tax rates, engage in national campaign to raise awareness andrnincrease education about the benefits of voluntary compliance, increase the percentage of auditrncoverage of taxpayers, penalize defaulters and “name and shame” them, simplify tax laws,rnclose tax law loopholes, and, train tax inspectors.

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