Herambe University Faculty of Business and Economics Department of Mba - Program
Herambe University Faculty of Business and Economics Department of Mba - Program
Herambe University Faculty of Business and Economics Department of Mba - Program
ECONOMICS
DEPARTMENT OF MBA.PROGRAM
BY : BESHIR KEDIR
ADIVESOAR : Dr.ABDI
MARCH, 2021
ADAMA, ETHIOPIA
i
TABLE OF CONTENTS
Page
CHAPTER ONE............................................................................................................................1
1.INTRODUCTION......................................................................................................................1
3.3.2Specific objectives........................................................................................................................4
2.REVIEW OF LITERATURE....................................................................................................6
2.1.Theoretical concepts..................................................................................................................6
2.1.1.Theoretical review of tax administration.....................................................................................6
.Research Methodology.................................................................................................................9
3.6.Study variables.........................................................................................................................12
3.7 .Data analysis and presentation methods.................................................................................12
3.8.Ethical considerations..............................................................................................................12
. Work plan schedule..................................................................................................................13
Budget plan...................................................................................................................................14
REFERENCES..............................................................................................................................15
Appendex--------------------------------------------------------------------------------------------------------------------------16
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CHAPTER ONE
1.INTRODUCTION
3
1.3.1.General objective
The main objective of the study will be to identify tax assessment and collection challenges of
category ’’ B’’ tax payers: A case of in Lode Hetosa Revenue Authority
3.3.2Specific objectives
1. To examine the status of tax assessment and collection challenges from category “B’’ tax-
payers.
2. To investigate the challenges associated with tax payers in category “ B’’ tax- payers
3. To explore the challenge associatewith tax revenue authority of the in Lode Hetosa.
Geographically, the study will be impounded within Lode Hetosa district boundary,Though
there are many problems generally the macroeconomic factors have a huge impact on qualities
and performance of loans, the study will be not encompass them.
4
relevant sector in the target may have no time to answer and hence, it has been difficult to
interview most of government officials in case Coved 19 pandemic desease if not fully recovered
until that time.
CHAPTER TWO
2.REVIEW OF LITERATURE
2.1.Theoretical concepts
5
should be taxed in the same way without any discrimination. So, tax can be defined as, "an
obligatory fee or more specifically, "unreturned payment", paid by individuals or businesses to a
government (Richard, 2005). Tax has been defined by different authors and professionals in
various ways. Taxes are the chief source of the public revenues. Government needs financial
property to act as a government and play a role that is expected from it by the public.
1.Empirical evidences
Kangave (2005) discussed tax administration in Uganda’s context. It then discussed Uganda’s tax
arrangement, the problems face in administering taxes, and it gave achievable solutions to the
troubles the author identified in his research. The author, in his research, recognized fraud, tax
avoidance, and insufficient resources for tax administration poor quality of audits and inadequate
support for tax administration as problems or challenges of tax management that have weakened
the ability to achieve desired revenue targets. The writer did not purport to address all of the
problems. Neither does it set out to attend to in detail the causes of these problems. Instead, it
points out the problems
Moreover, the author recommendations for solving the tax administration problems were adopted
from the Canadian tax administration method. the effect of plummeting the administrative costs
of identification, assessment, auditing and enforcement. The organizational simplicity of "tax
handles", however, while influencing tax policy, should not be allowed to dictate it. Focused
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the highest and the lowest points.
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3.2 Research design
Research design is the plan of scientific research proposal that guides the research in collecting,
analyzing and interpreting observed facts (Kothari, 2004).The study will be focuse on non-
experimental design that involved asking questions a representative sample of the population
using questionnaires to get both quantitative and qualitative data.
The qualitative data will be obtaine from the Manager and customers.
quantitative data will gather from organization profile, research works, books and web
pages.
The study will be undertaken using both primary and secondary sources of data.
The primary data will be obtaine through personal interviews with the managers and
questionnaire will be distribute to the customers.
Secondary data will be collected from Internet web sites, manuals, magazines, journals,
plan and reports. In addition, the researche uses to collect by investigating a number of
written materials such as from books, records, publishe and unpublishe research papers,
articles and proclamations that will use to conduct this research.
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population and select the sample in primary data collection. Secondary data will be collected
from different sources such as Lode Hetosa woreda administration office and revenue authority.
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3.6.Study variables
Challenges of tax assessments and collection: The prevailing shortcomings of tax assessment
include investment of extra administration cost, escaping of tax net, under-taxation, low tax
compliance behavior, and/or uncertainty on the part of the tax authority and taxpayers attributable
to the difficulty of locating the actual amount of tax liability to be paid. The indictor of this
variables 1 if the taxpayer faces the challenge and if the taxpayer does not faces the challenges..
Tax Rate Management: Tax management refers to the identification of tax liability based on the
existing tax law, the assessment of this liability, and the collection, prosecution and penalties
imposed on disobedient taxpayers.
Data analysis is a procedure of bringing order, structure and analyzing the wide range of data
collecte (Smith, 2013). After data are collected from relevant primary sources, the data will be
edite, code and entered into a computer by using statistical package for social sciences (SPSS ).
3.8.Ethical considerations
The following ethical considerations will be given concentration by the research proposal while
conducting the research or collecting the data:
A. Respect for persons: The privacy of the participants has been respected.
B. Voluntary participation: No participants will be forced to take part in the research and
participants will free to withdraw from the research at any moment.C. No harm to
participants: The researchers make sure that there is no any physical or psychological harm
done to the participants as a result of the study.
D. Anonymity and confidentiality: All information gathered during the study has been handled
confidentially and permission from the participants will be obtained for all information to be
shared openly.
E. Beneficence: The researcher will give rise to norms requiring that the risks of research be
reasonable in the light of the expected benefits.
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WORK PLAN SCHEDULE
Time plan
Activity Nov Dec Jan Feb Mar Apr MAY Jun Jul
Title
Problem
Literature
Proposal writing
Proposal submission
Proposal Presentation
Question
Data collection
Analysis
Thesis submission
Thesis Defense
. Budget plan
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1 Transportation Birr 500.00 500.00
Total 12,212.00
REFERENCES
Asamnew Gebresilasse, 2013.. ment and colleTax assessction problems of Category “A”
taxpayers: A case of Yeka Sub City.( AAU). Retrieved from
http://hdl.handle.net/123456789/3310
Asian Development Bank, 2001. Tax Conference, Challenges of Tax Administration and
Compliance.
Burns ,R.P., and Burns,R.,2008. Business research methods and statistics using SPSS.
Burgess, R., and N. Stern, 1993. “Taxation and Development,” Journal of Economic
14
at <http://visar.csustan.edu/aaba/LaurenDamme.pdf>, accessed on January14
ERCA, 2010. "Federal Government Tax Collection,” Ethiopian Revenue and Custom
Authority. Addis Ababa.
Esay Solomon , 2014. Factor Affecting Fairness of Taxation on Category “B” Tax payers. In
Partial Fulfillment of the Requirements for The Degree of Master of Science in
Accounting and Finance Hawassa University.
Ethiopia Trade and Investment ,2015 . Ethiopia trade and investment rule and regulation
September 2015.
Field .A.,2009. Discovering Statistics Using SPSS(3rd edition).London :SAGE Publication ,Inc.
Gupta Alka, 2001. "Public Finance and Tax Planning", Anol Publication, New Delhi.
Hair F.,Pinto,S.and Brito,C.,2007. Multivariate Data Analysis .5th Edition .Upper Saddle River .
NJ: Prentice-Hall International.
Hesse, eds., 1993. Administrative Transformation in Central and Eastern Europe, Towards
Public Sector Reform in Post-Communist Societies, Blackwell Publishers, Oxford, UK.
And Cambridge, MA.
H.L Bhatia, 2003. Public finance, Delhi, College of commerce, 23 edn.
IMF, 2006.Domestic Taxes and International Trade: Some Evidence Prepared by Michael Keen
and Murtaza Syed1 Authorized for distribution by Michael Keen February 2006
James, 1999 .Tax Compliance and Administration, in Handbook on Taxation, edited by W.
Bartley Hildreth and James A. Richardson (New York: Marcel Dekker, Inc.), pp. 741-
768.
James, S. and Nobes, C, 2000. The Economics of Taxation: Principles, Policy and Practice
15
Jenkins H.,1994.Formulation and estimation of stochastic frontiers production function of
Kangave, 2005. Improving tax Administration: A case study of the Uganda Revenue Authority,
Kothari, C.,2004. Research Methodology: Methods and Techniques. second Revised Edition ed.
Kornai,Y.,1990.Designing VAT Systems :Some Efficiency consideration , “ Review of
Kussi, 1994. Tax reform and Revenue productivity in Ghana Published by The African
Lymer, A. and Oats. L., 2009. Taxation: Policy and Practice. 16th ed. Birmin Fiscal
Publications.
Mansfield, C.Y., 1990. “Tax Reform in Developing Countries, the Administrative Dimension”,
Misrak Tesfaye, 2008. "Ethiopian Tax Accounting: Theory and Practice", Senior Essay,
16
Oberholzer. R., 2008. Attitudes of South African Taxpayers towards taxation: A pilot
Bombay.
Sahota, 1931.The performance of the Indian tax system for the period 1948-58.
Smith,S.A.a.m.,2012.Fundamental of marketing Research 1st ed .S.I. SAGR publications, Inc.
Simiy.D.,2013.Challenges Affecting Collection of Turnover Tax in Nairobi ,Kenya (Master’s
Thesis) .Retrieved from Kenyatta University Repository.
Teame H.,1985. Measuring the Efficiency of decision making Units, “European Journal of
Operational Research”.
Teshome ,1979.Category “C” Tax Assessment and collection problems :The case of keble 01/18
of Lideta Sub-city ,Unpublished ,Addis Ababa :St.Mary’s University College.
Wogene.,1983 . The contribution of tax reform, the changes in its structure (1983: 26-7).
World Bank ,1999 .Lesson of tax reform the World Bank ,Washington ,D.C.
Zelalem.Y, 1999. Revenue Productivity of the Tax System in Ethiopia. M.Sc. Thesis, Addis
Ababa University.
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APPENDIX
Appendix I : Questionnaire for tax authorities employee.
Harambe University
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valuable for the successful completion of this paper and I will be immensely appreciate your
response for all questions be responded genuinely. I can promise you that your identity will be
completely anonymous. I thank you very much in advance for your collaboration and for
sacrificing your invaluable time.
Address: Tel. 0913199259.
E-mail; beshirkedir2021@gmil.com
Tax Authorities Employee
I. Personal Background
A. Personal Information
Please kindly tick (X) at the appropriate choice in the given box for close ended question and
write briefly for open ended question at the given blank spaces.
1). Gender Male Female
2). Age From 21-30 from 31-40
From 41-50 Above 51
3) Educational Level
Certificate diploma
BSc. /BA Degree MSc/MA and above
4) Work Experience
Years and Below 5-8 Years
9 Years and above…………
5) What is your current marital status?
Widowed Cohabiting
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Business Profit Tax Payroll tax VAT Rental income
Others specify
…………………………………………………………………………………………………..
C. If you response for question “A” is “yes” What do you think is the causes
For the challenge?...........................................................................................................
……………………………………………………………………………………………………..
About awareness creation on tax administration and other tax related issue for the following
questions please put tick (x) mark on the choice of your response which shows the level of your
agreement.
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III. Please write short and precise response for the following questions.
a. What suggestions do you give that could mitigate problems related to tax education or public
awareness program so that tax evasion is
minimize……………………………………………………………………………………………
………………………………………………………………………………………………............
..............................................
b. Specify the weak links that exist in Lode Hetosa woreda revenue authority that open the
door for corruption by tax officers related with tax ?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………
c .If you think existing tax enforcement and penalty are weak, what do you
think are the reason(s)
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………
d. What do you think are showing on tax assessment and collection challenges in
general?...............................................................................................................................................
............................................................................................................................................................
............................................................................................................................................................
...............................................................
f. If you are supposed given the chance to improve the present tax assessment and collection
challenges which part of the rule and regulation should be
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improved?...........................................................................................................................................
...........................................................................................................................................................
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Services providers
7. Legal form of the business.
Sole proprietors ship Share company Joint ventures others
8. What is your average annual revenue?
Below 50,000 thousand birr. 100,000 thousand birr. 500,000 thousand
birr 1 million and above
B. is there any challenges facing you when you go to pay your tax liability?
Yes NO
Please rate your attitude on the following statement of (Over Estimation, Training, Tax Rate
Management, Transparency and Non participatory) using scale of rate in strongly agrees, agree,
neutral, disagree, and strongly disagree.
Summary of respondents’ response on service given by Woreda Revenue Authority (WRA)
No Statement Strongl Agree Neutral Disagree Strongly
y agree disagree
A. over Estimation
1 The Tax rate is unfair.
2 The business income tax does not
consider ability to pay.
3 The tax liability based on business
income tax is certain.
4 The business income tax is not
based on equity principle.
B. Transparency
5 You do not get notices about
taxation.
6 When you go to pay your tax
liability Inefficiency of Tax
Collectors, Discrimination and
unfair Treatment encountered.
7 You do not get clear and
understandable the notice.
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8 You have given the time to pay
your tax liability if you have put in
bankruptcy is not enough.
9 There is lack of transparency and
consistency in imposing penalties.
C .Training
10 The education and awareness
creation program through media,
brochures and others means is not
sufficient to improve tax
compliance.
11 There is insufficient information to
improve tax compliance?
12 You accept estimation on certain
business operation is not proper.
13 If estimation on business operation
is improper and not logical
solution must be set to be desired.
D. Tax Rate management
14 Time it takes you to pay your tax
liability is unfair and not enough.
15 Tax payment period is not enough.
16 There is corruption during
estimation on business operations.
17 Discussing on problems exercised
may brought solution to business
operations and with the concerned
bodies.
E. Non participatory
18 Government does not involve
taxpayers in drafting tax policies.
19 Government not values feedback
about how the tax system is run.
20 Government does not consider
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taxpayers opinion when applying
tax policies.
21 Taxpayers have no representative
in the tax authority.
22 No needed to participate each
category of taxpayers during
estimation.
Harambee University
Kafaltoota galii gibiratiif gaffilee dhiyatan.
Kayyoon gafficha Aanaa Lodee Heexosa tti kafaltoota galii gibira sadarka “B’’ akkata galii
gibiraa ittii tilmamamuu, itttiin murta’uu fi ittin sassabamu hanqinnota qoa’annoo fi qorannoo
gageeffamu obbo Bashiiir kadiir Harambee University barata public Bisiness Adeministirashin
tti.
Qo’annoo fi qorannoo Kun kayyoon isaa akkata “galii gibiraa motummaa ittiin tilmamamu,
itttiin murta’uu fi ittiin sassabamuu rakkinnota mul’ataan’’ mataa dure jedhu irratti Kan
gaggeffamu yoo ta’u barnoota public Bissinees Adeeministereshin mastersittiin Kan guutamu
fudhatamu ta’a.
Qo’annoo fi qorannichi qamotaa seera basuuf, seera hikuu fi hawaasa kafaloota galii gibira ni
tajajila jedhame eegama.
Qo’annoo fi qorannoo Kun fedha irratti Kan hunada’e ta’a .Gafannoowaan deebiin kennamu
icittiin isaan eenyumma deebii deebisa Kan hin ibsine ta’a. Deebii hatanatama nafi kenitanniif
duran durse galani Koo isiin haa gahu.
Gaffilee kamuufu obbo Bashiir Kadiir odeffannoo armaan gadiittiin na argachu ni dandessuu.
Lakkofsa bilbila harka 09 13199259.
Lakkofsa email; beshirkedir2021@gamil.com
Galatooma.
Kuta 1ffaa kafaltoota galii gibirattiif gafilee dhiyataan.
A.Ragaa kafalaa galii gibirattin guutamu
Kafaltoota galii gibira iddoo qophayyee irrattii mallatoo (X) yadaa kessaan ibsuu kayyaa.
1 .Salaa: dhi dubra
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2. Umrii: waggaa 20 gadii waggaa 20_30 waggaa 31_40 waggaa 41
ol.
3. Sadarka barnoota:
Sadarka 1ffaafi Sana gadii sadarka 2ffaa Diploma
Degree jalqaba Degree 2ffaa fi ol
4. Dhabatichi bara kami hundeffame?
Waggaa 3 gadii Waggaa 4_6 Waggaa 6_8 Waggaa 9 ol
5. Hallii maatii ilalichise.
Kan fudhe/herumte Kan hinfudhin/hinherumin Kan ga’ela dige/digide
du’aa addaa bahan Kan biro
6. Walgalaa dhabatichi tajajila malirraa boba’ee?
Tajajila kenna Jimilaa ykn qinxaaboo Omishaa Kan biro
7. Qama seerummaa dhabaticha.
Kan dhufa Shirkina Waldaan Kan biro
8. Galiin keessan Kan waggaa meeqa ta’a?
Qarshii kuma 50,000gadii Qarshii kuma 100,000 gadii
Qarshii kuma 500,000 Qarshii miliyona 1 fi ol.
Kuta 2ffaa.
B. Yeroo galii gibira kafaluuf gara abbaa tayitaa galiwwan deemtan mudannoon isiin mudate
jira?
Eeyyee Lakkii
Kabajamtoota kafaltoota galii gibiraa gafilee itti-anan jiran irrattii yadaa qabdan (Tilmama humna
ol, Iftoomina ilaalchise , Leenjii kafaltoota galii gibiraa, yeroo kafalttii galii gibiraa fi
hirmachisummaa dhabuu ilaalchise) kennaa tajajila Abbaa tayitaa galiwaan Aanaa Lodee
Heexosa mallatoota (X) yaada keessaan ibsuu kayyaa .
Lak
kofs Qabxilee yadiin irraa kennamuu. Eyyee Eyyee Yadaa Lakkii Bay’ee
a Bay’ee hin sirrii miti
sirrii dha qabu
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C. Leenjii kafaltoota galii
gibiraa ilalichise
10
Hubannoo galii gibira irraatti isiin
argatan kalattii media,
barreeffamota fi tooftalee adda
addaan odeffannoo gaha kafalttii
galii gibira sera hoji irraa jiru
foyyessa adema hin jiru.
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17 Rakkoolee mula’ulataan marii fi
kallatti furmataa ta’uun qamoota
dhimmii ilaluun sirreeffama
adeema jira.
E. Hirmachisummaa dhabuu
ilaalchise.
18 Motummaan kafaltoota galii gibira
yeroo wixinnee kafalootaa galii
gibiraa qophesuu dhimmamtoota
irrattii hin hirmachisuu.
30
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