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Determinants of Tax Compliance: A Case of Nekemte Town Category ‘C’ Business Profit Tax Payers
International Journal of Economics, Finance and Management Sciences
Volume 8, Issue 3, June 2020, Pages: 89-97
Received: Mar. 24, 2020; Accepted: Apr. 28, 2020; Published: Jun. 3, 2020
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Dereje Birhanie Jemberie, Department of Accounting and Finance, College of Business and Economics, Debre Markos University, Debre Markos, Ethiopia
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This study is designed to investigate the determinants of tax compliance in a case of category “C” business profit taxpayers in Nekemte town. To achieve the designed objectives the study employed a quantitative approach. Necessary data for the study were gathered via questionnaire and reviewing necessary documents. To do this the researcher took out 346 samples from the total 2580 population size of category “c” taxpayers and analyzed the returned 240 questions. The sample size of the study was determined by using simple random sampling technique. Responses of respondents were presented by using the data presentation tools and analyzed via STATA 10 software application and descriptive analytical methods using tables and charts. The study found that, family size and length of tax payment period has a significant negative influence on tax compliance. On the other hand, tax knowledge and awareness and tax penalty and fines has a significant positive influence over the level of tax compliance. The assessed amount of tax, probability of auditing and attitudes towards equity and fairness are insignificant factors in determining the compliance behavior of taxpayer. Finally the researcher recommended that different job opportunities and incentives should be provided by the authorized body to increase earning of large size family members. ERCA should be follow up taxpayers and control their activities to easily prevent evasion by taxpayers; and sufficient and adequate training, awareness creation and education should be offered to taxpayers to enhance their knowledge regarding to tax. Besides ERCA should take measures and penalties on those taxpayers who are not willing to pay their tax liability within a specified time period for the purpose of generating more revenues.
Assessed Amount of Tax, Length of Tax Payment Period, Tax Compliance, Taxpayers, Penalty
To cite this article
Dereje Birhanie Jemberie, Determinants of Tax Compliance: A Case of Nekemte Town Category ‘C’ Business Profit Tax Payers, International Journal of Economics, Finance and Management Sciences. Vol. 8, No. 3, 2020, pp. 89-97. doi: 10.11648/j.ijefm.20200803.11
Copyright © 2020 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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