External Factors Affecting Voluntary Taxpayers Compliance: The Case of Amhara National Regional State Revenue Authorities

Abstract

Audit productivity, tax investigation and criminal penalty can play a major role in improving voluntary taxpayer’s compliance by impacting taxpayer behavior. The study has attempted to examine the impact of audit productivity, tax investigation and penalty on improving voluntary taxpayer’s compliance by using secondary macro data. To analyze the data the descriptive statistics and inferential statistical analysis method was employed. The descriptive result of the study shows that there were lack of sufficient personals in the authority, low performance of audit coverage, increasing performance of audit productivity, inconsistent result of tax investigation and penalty. The Pearson correlation and multiple regression result shows the level of voluntary tax compliance is significantly related with audit productivity, tax investigation and penalty. The study concludes that since the contribution of audit productivity, tax investigation and penalty on improving voluntary tax payer’s compliance is significant among other measures, revenue authorities of the region and other concerned parties should give more emphasis on the role of tax auditors, tax investigators and tax penalty officials by fulfilling the required staff and qualifications to improve voluntary tax payer’s compliance and thereby increasing regions revenue through tax.