Abstract:
Tax is one of the main sources of government revenue. This study was conducted to investigate
the Determinants of Tax Compliance of Business Taxpayers in North Shoa Zone, Amhara
Regional Government Administration Taxpayers’ Office. Descriptive and explanatory research
designs were adopted. Data was analyzed with the help of Stata14 statistical software based on a
sample of 399business taxpayers. The Pearson correlation and the multiple linear regression
analysis signify existence of positive and statistically significant relationship between knowledge
and awareness about tax, tax systems, tax office service, government spending of tax, simplicity
of tax system, tax penalties and enforcement, tax rate and the dependent variable tax compliance
behavior of taxpayers’ in North Shoa Zone. The study recommended that knowledge and
awareness creation programs should be designed in a regular basis for business tax payers
found within North Shoa Zone concerning how to fill tax returns, compute and pay tax liability
to the tax authority timely. Besides educating rights and responsibilities to taxpayers, the tax
authority should inform the benefits of fulfilling tax liability for the development of North Shoa
zone in particular and the country in general. Additionally, the tax authority should develop
different incentives and reward mechanisms for those who pay their tax liabilities voluntarily
on time rather than focusing only on penalizing those who do not pay their tax liability on time.
