DETERMINANTS OF BUSINESS INCOME TAX PAYMENT IN KONSO ZONE, SNNPR, ETHIOPIA

Abstract

In order to financing public expenditure, government tax by reforming and restructuring the existing tax system. Konso Zone Revenue office is one of local government office levied and collects taxes like business income tax for the provision of goods and services for the society, but the revenue office is not able to collect the tax revenue as expected because of taxpayers unable to pay or unwilling to pay the required business income tax. The objective of this study is to assess factors determining business income tax payment, the case of local taxpayers in Konso zone, southern-Ethiopia: The researcher was used descriptive research design with quantitative and qualitative techniques. Both primary and secondary data were used. The total population of this study was 3225. To determine the required sample size the Yamane sample determination formula was used and Sample size of this was 335. Stratified random sampling technique was used to select 335 respondents and 4 officials selected by using purposive sampling technique. Five likert scale questionnaires and interview were used to collect required data and documentation analysis in the study area. The data was analyzed by using ordinary list square (OLS) or multiple regression model so as to increase richness of the research findings. The findings from the study reveal that; age, education and income positively affect business income tax payment, while tax base and contraband negatively affects business income tax payment significantly. The study concluded that the factors concerned with weak revenue collection efficiency and administration in local government authorities were, low education level and low income of taxpayers, contraband trade and final, use of few types of tax base. Therefore, the study recommended that, to improve revenue collection the local government authorities of konso must support women traders, teach youth people about tax law, provide work opportunity for the people, protect legal traders from illegal competitive advantage and subsidize legal suppliers, and must find new revenue sources.