ASSESSMENT ON PROBLEMS OF VAT ADMINISTRATION IN THE CASE OF GAMBELLA REGIONAL STATE (GAMBELLA, ETHIOPIA)

Abstract

VAT administration process is an interrelated, operation covers a wide area of study, encompassing aspects such as registration of taxpayers, taxpayers service, assessments, returns processing, collection, audits and appeal. VAT administration functions are essential administrative activities of a tax administration organization in order to collect taxes and enforce compliance. To achieve the objective of VAT administration function it requires application of information technology and qualified tax officials with requisite skills to maintain these systems and operate them to their fullest potential. The general objective of the study is assessment on problems of VAT administration in the case of Gambella regional state (Gambella, Ethiopia). The study addresses the following specific objectives: To investigate VAT administration problems pertaining to VAT registered tax payers as a result of VAT law enforcement by the tax authority (Particularly VAT registration, invoice, file, payment, audit and penalty) in Gambell, To evaluate the perception of taxpayers towards VAT and how strong enough the tax office is to control noncompliance and delinquent taxpayers. The study was employed descriptive survey method and both qualitative and quantitative approaches were used. Both primary and secondary data was used using by using questionnaires and interview data collection tools and Stratified Probability sampling technique was used for VAT registered taxpayers and purposive non probability sampling technique was use for employeesThe problems identified were; taxpayers unable to register for VAT voluntary, lack of proper recording system, using illegal invoice weakness on audit investigation and inspection, lack of resources and infrastructure development and  lack of incentives for employee.Based on the findings the possible recommendations were awareness creations to improve voluntary registration, providing training how to keep proper record, taking measures on taxpayers who used illegal invoice, increase the number of auditors and tax intelligence,  established infrastructure, giving incentives and training to motivate employees of the revenue office.