THE EFFECT OF VALUE ADDED TAX ADMINISTRATION ON REVENUE PERFORMANCE: THE CASE OF GAMO GOFA ZONE, SOUTHERN, ETHIOPIA

Abstract

The purpose of this study was to assess the effect of Value Added Tax (VAT) administration on revenue performance in Gamo Gofa Zone. The total population of the target group of the study area 686 VAT registered tax payers from sample woredas. Out of 686 to achieve this objective, the study has applied purposive sampling technique to select 253 representative respondents. Mixed research designs both quantitative and qualitative methods were adopted. The secondary data were examined from annual reports of the authority from the year 2004-008E.C.The Quantitative data were collected through questionnaire and entered into statistical package for social science (SPSS) software version 20 and analysed using tools of descriptive statistics such as: mean, frequency& percentage. The qualitative data collected informer interview through prepared checklists and semi-structured questions respectively were interpreted and analysed to triangulate the data which were collected and analysed by using quantitative method. Generally, the cumulative findings shown that lack of awareness among tax payers; limitation of payer identification & registration; lack of effective audit practices; lack of supply and usage of ETR machine are the effects for VAT administration in the study area. Established and in depth creation of awareness, institutional capacity building, strong follow- up and implication of the declared laws, rules and regulations, design to use modernized monitoring mechanism, follow networking system that, SGTA (Standard Government Tax Administration) & push tax payers to use cash registration machine are major recommendations by the researcher according to its findings.