Does Ethiopia is Effective in Implementing a Presumptive Tax System? Evidence from Hawassa City, Sidama Regional State

Abstract

This study was set out to examine presumptive tax system implementation effectiveness in Hawassa city of Ethiopia. To achieve the objective of this research, the study used a mixed research method. The primary data sources were collected through a structured questionnaire and focus group discussion. The analysis has been done.  Then, the result of this study showed that the Hawassa city revenue authority is not effective in presumptive tax system implementation. Also, this study revealed that lack of equity and fairness in presumptive tax assessment, lack of clarity and simplicity of tax procedure, the complexity of tax rules, taxpayers’ poor awareness of the presumptive system, the existence of unethical and corrupt tax officials, and poor social norms between taxpayers and the tax authority were the key challenges faced by the city tax authority. Finally, the findings of the study inform policymakers about presumptive tax system implementation effectiveness in Hawassa, Ethiopia.

Keywords: presumptive tax system; implementation; effectiveness, Ethiopia

DOI: 10.7176/EJBM/13-17-04

Publication date:September 30^th 2021