Abstract:
Tax is the major revenues to the government in developed and developing countries. Many professionals and authorities strive to enhance the level of tax revenues and make tax revenues significant portion of annual national budget. The low level of tax revenue collection by local authorities has been a source of concern. The basic objective of the study was to analyse factors affecting tax revenue collection efficiency in Gamo zone, SNNP regional state of Ethiopia. The study was based on cross-sectional survey design. The study areas were selected purposively and simple random sampling was used to select respondents. Both primary and secondary sources of data were surveyed. The primary data were obtained from management members and office employees of tax authorities and secondary data were gathered and utilized from various sources including reports of local, zonal and regional tax authorities. Multistage-stage sampling technique was employed to select the respondents. Descriptive statistics was utilized to describe characteristics of the sample. Both Tobit model and Data Envelopment Analysis were applied to analyse factors affecting tax revenue collection efficiency. The analysis was done using Stata 14 software. The results showed that a multitude of factors significantly influenced tax collection efficiency. The majority of employees (86.8 percent) responded that the overall status of tax revenue collection efficiency was poor and bad. The Tobit model results revealed a coefficient for Reporting period (-0.1297152), Employee tax (-0.2515778), Tax payer awareness (0.2568221) and Penalty (0.0903414) which were statistically significant. The Data Envelopment Analysis results showed that Arbaminch Zurya, Kenba and Gerese woredas had efficiency score (theta) of 1. The study there fore should be of concern for improving tax revenue collection efficiency at local authorities
