FACTORS AFFECTING THE PERFORMANCE OF VALUE ADDED TAX COLLECTION IN CASE OF ROBE TOWN REVENUE AUTHORITY

Abstract The aim of this study was to investigate factors affecting the performance of value added tax collection in Robe town. To achieve this objective both qualitative and quantitative research methods was used. Secondary data was collected from various sources like reports and published articles. Regarding to primary data, it was obtained from distributed questionnaire that was collected from 168 respondents selected from 457 VAT registrants tax payers’ and 20 employees of tax officials’ samples generated by using kootheri,2004 formula for VAT registered payers and judgmental sampling techniques was used for tax official. These samples were selected by using random sampling techniques for 457 VAT registrants tax payers’ and judgmental sampling techniques were used for tax official 20 Robe towns revenue offices. Descriptive statistics and econometric models through ordinary logistic regression models were used with the help of SPSS version 25 statistical software. The result of ordinary logistic regression models regression showed that from nine variables tested as factors affecting performance of VAT variable such as Tax payer awareness, , level of evasion, Complexity of tax system, fine and penalties availability of cash register, filling system, VAT rate and experience of employees has statistically significant relationship between performance of value added tax collections Lastly, based on the study result some possible recommendations were given. Those includes; government should take the lion share to create and deliver awareness on society via different mechanisms, strong control on illegal broker who disturb the flow of VAT chain, avoid corruption and create good governance related to the paying community. RTRO should secure filling system of documents, prove quality of cash register, and also apply similar implementation throughout the nation. 1