WHAT MATTERS FOR THE EFFICIENCY OF MICRO BUSINESS TAX COLLECTION? EVIDENCE FROM THE EASTERN PART OF ETHIOPIA

The purpose of this study is to determine the variables affecting the microbusiness tax collection efficiency in Ethiopia. An ordered logistic regression model were used to analyze the efficiency of micro business tax collection as dependent variable and taxpayer tax knowledge, tax law enforcement, corruption, tax compliance resolution, and fairness of tax as independent variables, through a questionnaire by expending the stratified sampling technique. The study results show that efficiency of micro business tax collection in the eastern part of Ethiopia are significantly influenced by the (1) taxpayer tax knowledge, (2) tax law enforcement, (3) corruption control, and the (4) tax compliance resolution capacity of the tax authority. The study provides various insights to improve the efficiency of microbusiness tax collection in Ethiopia from the perspective of microbusiness taxpayers. The final results of this study are distinctive because they demonstrate how taxpayer awareness of taxes, the effectiveness of tax laws enforcement, the control of corruption, and the tax authority's ability to resolve noncompliance issues all impact the efficiency of microbusiness tax collection in Ethiopia.