Challenges Of Tax Administration In Arada Sub-city Of Addis Ababa City Administration

Tax administration is a component of public administration designed to control thernprocesses and operations of public revenues in accordance with new public managementrnapproaches which focuses on efficiency, performance measurement and requirements ofrngood governance. Governments require tax administration and compliance to producernrevenue from private entities to provide public goods and services. Ethiopia needs to userndomestic based resources mainly obtained from tax like Value Added Tax. The study hasrnfocused on addressing issues relating VAT administration factors affecting VAT revenuernperformance. In order to generate appropriate VAT, its administration should bernefficient. Therefore, the study has been conducted on analysis of VAT administrationrnefectivness in Arada sub city of Addis Ababa city administration. The study raised majorrnresearch questions related to VAT registration, assessment, collection, investigation,rnrefund and Tax payers Service Delivery. In order to achieve the purpose of the study. Inrnorder to address the questions, descriptive research method and purposive and stratifiedrnsimple random sampling techniques were employed to gather data. Respondents whornhave been participated in the study were officers from Arada sub-city small and micro taxrnpayer’s office and tax payer in Arada.rnAccording to the response of the respondents, certain factors were found to be the mainrnconstraints at Arada Sub City VAT administration. These were:- lack of well trained andrncredible tax officials mainly in taxpayers identification and registration process; lack ofrnwell trained officials to use SIGTAS (Standard Integrated Government TaxrnAdministration System) so not possible to know the exact number of active VATrnregistrants, to identify and control non filers or stop filers using the computer system. Inrnaddition; the office facilities and procedures are not supportive to comply for taxpayerrnand tax officer, no audit plan based on risk assessment, weak enforcement, absence ofrnwell organized taxpayers’ education and assistance program about VAT, poor refundrnmanagement and low voluntary compliance of taxpayers in the Sub City are the mainrnconstraints. Finally based on the findings, possible solutions were given. These include;rnimprove taxpayer identification and registration, improve VAT collection, developrnplanned auditing, establish effective enforcement mechanisms, and improve servicerndelivery, voluntary compliance of taxpayers and refund manage

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