Dynamics of Value-Added Tax collection performance and its determinant in Ethiopia: Evidence from Benishangul-Gumuz Region Revenue office

Abstract

Abstract Purpose: The purpose of this study was to examine the dynamics Value-Added-Tax collection performance and its related determinants in Ethiopian with special reference of Benishangul-Gumuz region state Revenue offices. Methodology: The study employed an employed a mixed explanatory cross-sectional survey research design with primary and secondary data. The sample size of this study was 281 out of which 260 VAT tax payers determined by Yamane’s formula and 21 director and supervisor revenue office staff member was included in the study by using proportional and purposive sample selection method. Finding: The result of binary-logistic regression analysis confirmed that tax payer’s awareness, tax evasion, tax law enforcement, and tax staff knowledge are significant drivers influencing the performance of Value Added Tax revenue collection. Research Limitation/Implication: The overall empirical tests were for this study were conducted only on 260 taxpayers and 21 tax official during the period of the study. To generalize the result made on this study, the future researcher should use more evidence. Practical Implication: This research might help the revenue office tax official in investigating prime determinants of value added tax revenue collection performance and by increasing the amount of tax revenue collected from the tax payers. Originality/value: This paper adds value to existing literature dynamics of Value-Added Tax collection performance. Specifically, it considers the impact of tax payer’s awareness, tax evasion, tax law enforcement, and tax staff knowledge on Value-Added Tax collection.