Determinants of Turnover Tax Collection Effectivenes: The Case of West Gojiam

Temesgen Ayenew Birhan


The most common method of financing government expenditure is by taking resort to taxation. In order to generate appropriate revenue from TOT, the administration should be effective. The researcher set the general and specific objectives of the study and the major research questions related to turnover tax collection. From the related literature the researcher considers independent variables which explain the dependent variable of TOT effectiveness. Having those variables the research hypothesis formulated based on the given number of independent variables that were tested after the required data were gathered. In order to address the research questions and achieve the objectives, explanatory research method and census sampling method were employed to gather data. Respondents who participated in the study were tax administrators from all woredas found in west Gojjam. Quantitative research approach was used. The Primary data which were collected through questioner were analyzed by using structural equation model and most secondary data used to develop related literature and used to establish the hypothesis. The dependent variable is measured by the effectiveness of TOT collection on average result of two years period. The independent variables are measure based on the five scale Likert type question. After collecting data from tax officials the researcher reaches a conclusion by analyzing data in Amos soft ware. Tax payers’ ignorance of their obligation, corruption and collusion, tax audit and verification and convenience of payment were the major determinants of effectiveness in turnover tax collection. The researcher recommend to tax office after drawing conclusion.

Keywords: Turnover tax, structural equation model, value added tax, Amos

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