Determinants of Tax Compliance Attitude with Taxation: Evidence from Taxpayers in Gedeo Zone, SNNPRS, Ethiopia

Abstract

Tax compliance attitude is influenced by demographic, individual, social, institutional and economic factors. Thus, the objective of this study is to identify the determinants of tax compliance attitude with taxation, case of category ‘A’ taxpayers in Gedeo Zone. To this end, the author used mixed research approach.The target population of the study was category “A” tax payers of Gedeo Zone, SNNPRS, and Ethiopia. A sample of 291 Category “A” tax payers were randomly taken from the total of 1069 Category “A” tax payers in Zone. Both primary and secondary data were collected. Primary data were collected throughstructured questionnaire and direct personal interview taxpayers representatives’.  And secondary data were collected by reviewing of related materials to achieve the objective of this study. Binary logistic regression model was employed to analysis the data through Stata software application version (12.0) to present the results of this study.  Then, the result of this study showed that out of ten explanatory variables incorporated in the model, eight variables such as gender, age, tax knowledge, simplicity of tax system, perception on fairness and equity, awareness on penalty, probability of being audit, and perception on tax rate were found to be determinants of tax compliance attitude of taxpayers with taxation in the zone. Whereas, education level and tax authority efficiency have no impact on tax compliance attitude. Finally, the findings of the study may inform policymakers about the determinants of tax compliance attitude towards tax system in the Zone, supports to formulate constructive policy and make decisions related to tax compliance issues in order to achieve the goal of raising required tax revenue to promote the economic development of the country.

Keywords: Taxation, Determinants, Compliance Attitude, Binary Logistic Regression model