The Factors That Affect Revenue Generation of Taxpayers: The Case of Bahir Dar City Taxpayers

Abstract

Revenue generation is one of the most useful activities to increase profitability and capital of taxpayers in business operation. Despite these, however, revenue generation in the study area is affected by different variables.  Therefore, the study was focused on assessing the effect of taxation on revenue generation: the case of Bahir dar city taxpayers. The total population in the selected area was taxpayers in the city. Then simple random sampling was employed to select sample respondents. Results are based on data collected from respondents of 150 randomly selected taxpayers. Descriptive statistics and linear regression methods were employed. The result shows that progressive tax system, taxpayers’ knowledge, tax administration and inflation rate are important components of taxation which affect revenue generation of taxpayers. The analysis further revealed that progressive tax system, taxpayers’ knowledge, tax administration and inflation rate is significantly associated with revenue generation. Government and concerned parties should work the best on these important factors because the effect of these factors also affects tax revenue generation of tax authorities since government collect revenue from taxpayers.

Keywords: Revenue generation, taxation, linear regression, taxpayers

DOI: 10.7176/RJFA/11-17-03

Publication date:September 30^th 2020