Determinant of Taxpayers Willingness to Pay Tax: The Case of Ministry of Revenue Dire Dawa Branch Office

Taxes are one of the country’s largest revenues, and they also constitute a form of self-reliance in financing the construction of a nation. Tax revenue is an important source of income for the government, and it provides the necessary funds to finance various government expenditures. Therefore, the main aim of this study is to assess factors that determine taxpayers' willingness to pay profit or corporate income tax in the ministry of revenue's Dire Dawa branch. The study collected data from taxpayers' in the study area through self-administered questionnaires, and probability and non-probability sampling techniques. Both descriptive and inferential statistics were used for the data analysis. The study used binary logistic regression analysis to test the research hypotheses. The result of the studies indicates that gender of the tax payer, education level, tax rate, penalty rate, simplicity of the tax system, and ethics and attitudes of the taxpayer positively affect the willingness to pay; however, gender of the tax payer, education level, and ethics and attitudes of the taxpayer do not significantly affect the willingness to pay, thus being inconclusive in the studies. Whereas variables like the age of the tax payer, tax knowledge, probability of auditing, fairness of the tax system, perception of government spending, and reference group negatively affect the willingness to pay taxes. However, variables like the age of the taxpayer, tax knowledge, and reference group are not significant. Therefore, the variables are inconclusive. The researcher recommends that a fair tax system's perceived fairness has a big impact on tax compliance. For this reason, the tax system should target people of profit or corporate income tax levels to collect taxes, which could deter tax evasion.