Determinants of voluntary tax compliance behavior in self assessment system: evidence from SNNPRS, Ethiopia

Determinants of voluntary tax compliance behavior in self assessment system: evidence from SNNPRS, Ethiopia

Tax payer’s voluntary compliance with the tax system influenced by economical, institutional, social, individual and demographic variables. Hence, the objective of this study is to examine factors that influence tax payer’s voluntary compliance behavior in Self Assessment System (SAS). Authors used a cross-sectional survey method of research design. The target population of the study was category “A” tax payers in purposefully selected five cities of Southern Nation Nationalities and Peoples' Regional State (SNNPRS), Ethiopia. A sample of 377 Category “A” tax payers were randomly taken from the selected cities. Both primary and secondary data were collected.

In order to analyze and present the results of this study, Pearson correlation matrix and logistic regression model were employed. The result of this study revealed that tax knowledge, simplicity of tax returns and administration, perception on fairness and equity, perception on government spending, probability of auditing, and the influence of referral group were determinant factors that influence voluntary compliance behavior of tax payers in SAS. Finally, the outcomes of the study may inform policymakers about the determinants of voluntary compliance behavior of tax payers in the region and helps to formulate better policy decisions related to voluntary tax compliance.