Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 209

Full Length Research Paper

Challenges of business income tax administration with special emphasis on collection process in Ethiopia: The case of Hadiya zone, Hossana town

Desta Temotewos Tumoro
  • Desta Temotewos Tumoro
  • College of Business and Economics, Department of Accounting and Finance, Wachemo University, Ethiopia.
  • Google Scholar

  •  Received: 20 September 2019
  •  Accepted: 24 July 2020
  •  Published: 31 August 2020


The objective of this study is to assess the challenges of business income tax administration with special emphasis on collection process in the case of Hadiya zone, Hossana town. To answer the research questions, the researcher used both primary and secondary data as a source of information. Initially, by using proportionally stratified sampling technique, 341 tax payers were selected as a sample size from the total population of 3077 tax payers of which 131, 163, and 2783 were categories “A”, “B”, and “C”, respectively. All the proposed sample size (341) was distributed to respondents. However, from the total distributed sample size, 280 (82% response rate) questionnaires were accurately responded and returned back. The descriptive statistical method was employed as a method of data analysis. As the results of this study revealed, there are some major challenges in the business income tax collection process such as: challenges associated with business income tax collection procedures, challenges associated with tax payers’ attitude towards tax system, lack of good tax administration and implementation; tax collectors unethical practice during tax collection; availability of unregistered traders or illegal traders; tax evasion and avoidance. Finally, the researcher gave some recommendations like distributing the tax laws and procedures to tax payers, increasing awareness to tax payers both in a short run and long run plan, developing tax authority’s administrative capacity using advanced technology to collect tax, revision of tax policy and others.


Key words: Tax administration challenges, business income tax compliance, tax payers’ attitude, tax payers’ perception, income tax collection procedure.