The Impact Of Tax Evasion On Revenue Collection Performance

This research paper will attempt to emphasize and highlight the impact of tax evasion on revenue collection performance in the wait sodo city revenue authority (WSCRA) and assess the prevailing situation to solve problems. Because the decrease in the government revenue has less satisfying social welfare and is mainly caused by the rise of tax evasion, it is necessary to study the effects of tax evasion, especially in developing countries like Ethiopia. Evasion influences our country’s growth.

Any form of tax evasion reduces this revenue and impacts largely on the government’s ability to provide services to the citizens.

In its endeavor to raise sufficient funds, the government increases the rates of tax and widens the tax bracket, thereby increasing the tax burden on the compliant taxpayers and this even causes further tax evasion. This study is reasonable on the basis that it is expected to be of great benefit to various stakeholders in varying ways as discussed below. Tax officers: As charged with the responsibility of ensuring that taxpayers are not negligent in paying their taxes, the study will help them identify with ease the methods that individuals and businesses use to evade tax and how they attempt to conceal the vice from the authorities as well understanding what motivates them and how they can intervene to mitigate the practice.

Researchers:

For those in the area of tax evasion, related areas, and academia at large, the study having spelled out in an elaborate way tax evasion and its impact on the government revenue in Wolayta Sodo town administration will serve as a good ground for theory development as no exhaustive study can be carried in this area and will also help in expanding knowledge on how taxes are evaded by traders and further their understanding on how tax payers evade tax and what related areas need further research.

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This paper will have a great role to create awareness of the compliance of taxpayers helping how the evasion is guilty on the country’s economy as well as collecting organizations by providing solutions to areas of problems.

Additionally, the study is reasonable on the basis that it would serve as good grounds for theory development which would give insight that would be useful about other interventions for tax administration in wait sodo city revenue (WSCRA) and add to knowledge by eliciting views on the effects of tax evasion on the revenue collection performance.

This would be a useful resource that would be beneficial to individual tax administrators, the government, and academia. Helps the government or the tax authority to know the ways of evasion and to improve laws concerning penalties of evasion were stricter and more severe, individuals and companies would be less likely to evade taxes overall and ways of controlling mechanisms regarding the assessment and collection of tax revenue to protect tax.

Creates awareness for the taxpayer society regarding the impact of tax evasion on ionrevenue collection performance. When Business Persons who pay taxes will demand the accountability of their taxes in the growth of the economy by putting pressure on the government to wisely spend taxes collected for the right purposes.

Gives direction or serves as a reference for the taxpayer as tax evasion is illegal or a criminal act a person who evades the payments of tattoo defraud the government applies for a refund he is not entitled to commit an offense and in addition to any penalty under south nationalities and peoples regional state revenue authority.

South nation nationalities Proclamation number 285/1994 article 48 section 11 may be prosecuted and on conviction be subject to a term of imprisonment not less than five years. Officials and governmental organizations help for policy formulation, planning, and development of appropriate tax systems in the WSTRA because those tax evasion practices are done with less awareness& illegal activities strictly cover in regulations and help other researchers as ian nitial idea to do further study on related topics.

Doing the research improve the researcher’s knowledge in practice that is by reading different secondary books and other sources.  Generally studying the impact of tax evasion on revenue collection performance is the most important issue to the tax administration as well as tax payer society even for all citizens by showing directions about its effects and preventing methods.