The Dynamics of Tax Assortment in Municipality, Ethiopia

Abstract

The government has conducted research to determine the variables influencing how well taxes are collected and administered. The value of tax collection depends on several variables, including the state of the economy, the public's support for the government's priorities, and the willingness of taxpayers. Effective taxation necessitates an effective tax system for collection. The right collecting mechanism is necessary for the provision of necessities like roads, schools, health facilities, and the like. The purpose of the article was to investigate the variables influencing Wolkite Town's category C taxpayers' tax-collecting efficiency. The goal of the study was to investigate the dynamics influencing the tax collection system's efficacy variables including tax compliance, tax awareness, individual income, tax avoidance, and evasion. Multiple regression models and a primary source of data were employed in the investigation. The data was analysed and presented using SPSS tools and descriptive statistics. According to the research paper's findings, tax awareness exhibits a negative and insignificant impact on the regression results, tax compliance is positive and significant, individual income has a significant and positive sign, and tax evasion and avoidance have a positive and insignificant impact on the effectiveness of tax collection. On the other hand, individual income and income tax compliance have a big influence.