THE ASSESSMENT OF TAX AUDIT PRACTICE AND CHALLENGES IN GEDEO ZONE

The major objective of this study was to assess the practices and challenges of tax audit in<br> Gedeo zone Revenue Authority. The study employed mixed research method where survey design<br> and interviews were employed. Survey was conducted with selected tax auditors and tax officers<br> working at Gedeo zone Revenue Authority. Actual sample size achieved was 384 tax officers<br> survey, and five years fiscal and financial data was gathered from Gedeo Zone Revenue<br> Authority and analyses. In addition depth interviews were conducted by purposive<br> sampling.Data was analyzed by mean and standard deviation by using SPSS (Statistical Package<br> for Social Science)<br> Results of the study reveal that the practices to achieve ultimate Goals of Tax Audit was found at<br> moderate level; the Office did not proportionally focus on all types of Tax Audit techniques; most<br> of the time Tax Audit activities were done without schedules. Overall the practices of Tax audit<br> at zone level were good practiced,The most frequently performed tax audit in revenue authority<br> branch offices in Gedeo zone are desk audits, comprehensive audit, deregistration audit, fraud<br> investigation and issue audit respectively on the basis of the mean value of the survey though<br> there is some sort of deviations in the reply among the surveyed individuals Concerning<br> challenges that influence the practices of Tax Audit; factors related with Traditions of<br> Corruption, inflated estimation of tax amount; not responding the compliance of Taxpayers on<br> time; Taxpayers consideration of illegal business practices as best way of doing business; and<br> absences of coordinated efforts among sector offices of the region engaged on Tax audit related<br> responsibilities were identified as the most sever challenges. Key recommendations of the study<br> include: the main goal of tax audit can be detection of tax evasion and avoidances, creating<br> prevention effect on non-compliant taxpayers’ and increasing tax compliance level of taxpayers;<br> assigning competent Tax Auditors, integrating sector offices’ efforts, developing and using<br> annual schedule of auditing for Taxpayers business firm, and provision of capital and<br> consumable resources and trucking the network and power failure.