A Survey of Business Tax Payers in Bahir Dar Town on the Ethics of Tax Evasion

Abstract

Tax evasion has the effect of deteriorating government revenue that in turn distorts resource allocation with current infrastructure. Tax evasion in most developing countries is so severe problem than developed countries. In fact, no many developing countries  have made an effort to measure the effect of ethics on tax evasion and  what cause tax payers to evade. Thus, the study is designed to examine the perception of tax payers related to tax evasion in Bahir Dar Town – Ethiopia. The study adopted field survey. The result t shows that the hypothesis that tax evasion is ethical sometimes with average respondents was accepted. However, the hypothesis that female would be   more opposed to tax evasion than male for minimum 12 statements out of 20 statements was not accepted.The study also found that the level of tax evasion when government corrupt is significantly higher than when it relates to other views expressed on government discrimination, unjust treatment and high tax rate. The study in general, indicates, from the various arguments that respondents gave to justify tax evasion include , government lenient , government corruption , unfair treatment of citizens, tax affordability and unfavorable tax system. This shows that the responsiveness of government in terms of accountability, transparency, public awareness, human right treatment and optimal tax rate play a significant role in the payment of taxes. The government and other policymakers should find the results of this study useful in discouraging tax evasion and in developing tax policies aimed at minimizing tax evasion

DOI: 10.7176/RJFA/11-17-01

Publication date:September 30^th 2020