VAT administration practice and revenue performance with respect to the challenge and opportunity in the case of Addis Ababa No. 2 Medium taxpayers Branch office

VAT, Performance, revenue

Abstract

The general objective of this research was conducted to answer the research questions of
VAT administration practice and revenue performance with respect to the challenge and
opportunity in the case of Addis Ababa No. 2 Medium taxpayers Branch office. It is a descriptive type of research; both qualitative and quantitative data analysis techniques were
used. Primary data were obtained with the help of questionnaire from concerned tax officials. Questionnaires were distributed for fifty-five employees of the branch to analyze the
data and statistical package for social science (SPSS) software version 20 was used. Further, secondary data was collected to measure the VAT revenue performance of the authority,
tables and percentages were used for data analysis. Thus the major problem of the authority
in the administration of VAT were: - consumers are not willing to transact with a proper VAT
receipt, low rate of voluntary compliance, tax authority Poor tax enforcement capacity,
shortage of well-trained employees, especially in relation to operating the computer program which creates difficulty in filing and registering, unfair competition between VAT registered and unregistered tax payers, lack of skill and experience to detect any tax fraud and
evasion, administration system of penalty is weak and lack consistency. Because of the
above-mentioned reasons and others bring a lot of impacts on the VAT administration performance and VAT payers, some of these are lack of confident in implementing their business as a result of unclear and inconsistent system among Tax payer which open a chance
for subjective way of treating tax payers and effects the competition in the market. There for
this research suggests that the office should improve the information technology (IT), system
to implement like filling, payment system, recording system, registration and others related
issues in order to overcome the complexity of tax administration and challenges. Finally, the
concerned body may take these findings worthwhile for corrective action as the researcher
put some helpful recommendations.