Chapter Three

Data analysis and interpretation

3.1 Introduction

In this chapter there researcher made an attempt to analysis the data collection from the
respondent and present finding. Because of the information gathered from Adwa office of
finance and economic development employee and those who paid tax in the town analysis is
done.

3.2. Personal Information

Table 1 Demographic Distribution of respondents .

Description Number Percentage (%)

Sex
 Male 6 60%
 Female 4 40%
Total 10 100%
Educational Level
 High school completed - 20%
 Diploma 2 80%
 Degree 8
 Master and above -
Total 10 100%
Source: survey result

From the total respondent 60% of them are males and the remain 40% are females. In the above
table no 2 show that the education level of the respondents. Most of the respondents are degree
with 80% of respondents, and the remain 20% of the respondents are diploma. So this indicates
that the institution is advantageous being all of the respondents are diploma and degree, mean
that all respondents are experienced in terms of the activity they performed.

3.3 Assessment of factor to be considered in laving tax

Table 2 Which type of problem do you face when you pay your tax liability

Question Total number of Percentage of

respondent responses

Which type of problem 20 Inefficiency of tax collector---

do you face when you 45%
pay your tax liability?
Discrimination------------------0%

Absence of tax collector-----10%

I don’t face any problem----45%

Source: survey result

From the information gathered through questioner, around 45% of taxpayers face problem of
inefficiency tax collector and the other 10% of face a problem absence of tax collector. The main
reason for inefficiency and absence of tax collector are lack of experience, knowledge, absence
of computerized conducting their jobs, absence of good management coordination and lack of
required labor.

3.4. To know the motivation made to employee to collect tax

Table 3 When do you pay tax liability

Question Total number of Percentage of

respondent responses

When do you pay tax 20 When I receive assessment

liability notification-------------------45%

Before due date-------------55%

After due date---------------0%

Source: survey result

Concerning on the payment period of tax liability around 45% of the respondents pay their tax
liability when they receive assessment notification after due date where as the remaining 55%
pay their liability before dues date. This happened because of the following reasons:
  Absence of willingness and poor understanding about the tax by the taxpayer
 The amount they pay may be beyond their paying ability
 The bureaucracy of the office
 They do not know the type of tax they pay and also the time when they pay

According to Ethiopian constitution, both regional and federal government has the power to
asses and collects tax from the society. Thus, Adwa town administrations have the power to
asses and collect tax all income from employment, profit tax, excise tax and turn over tax from
individual business trading in the town

The office has the following duties and responsibilities.

 To execute tax policy of federal and regional government

 To introduce new method for the efficient revenue assessment and accounting system
within the town
 To purpose for new revenue resource and follow up when it gate approval by the
government
 To introduce new procedures and man values for the identification and registration of
taxpayers
 To advocate taxpayers in order to be aware of their duties and right and so on

Source: the office vision and mission statement

Table 4. To know the annual income of your business

Question Total number of Percent of responses

respondent

Do you know the annual 20 Yes---------------------------------------70%

income of your business?
NO----------------------------------------30%

Source: survey result

From the above table-5, 70% of the respondents know annual income of their business. But most
of them have not accounting records. Thus, the office imposes tax liability based on authoritative
judgment. The reasons why they do not have accounting records are:

 When they need to evade tax burdens

 They may not have awareness about accounting records
 Table 5 Is the tax payment period enough

Question Total number of Percentage of

respondent responses

Is the tax payment period 20 Yes-----------------------------40%

enough
No-------------------------------60%

Source: survey result

From the information gathered in the above table 7, 60% of the respondent states that the tax
payment period is not enough. The main reason for this problem is

 Lack of awareness about tax

 Lack of co-ordination between taxpayers and the office

Table 6 Do you know the purpose of tax revenue

Question Total number of Percentage of

respondent responses

Do you know the 20 Yes-------------------------------80%

purpose of tax revenue?
No--------------------------------20%

Source: survey result

 From the abov24e table 8, 80% of the respondent said that they know their purpose of tax
revenue where as 20% of respondent do know the purpose of tax revenue. This due to
absence of awareness creation campaign in the office, lack of knowledge about tax
purpose in the taxpayers, etc.
Table 7 How do you consider the present tax levying and collecting system
 Question Gender Total number of Percentage of
respondents respondents

How do you consider Male Female

the present tax levying 5 5 10 Have insufficient man
and collecting system? power----80%
It is efficient-------0%
Not organized---20%

Source: survey result

 Based on information gathered through questioner and personal discussion with tax
assessment and collection office employee around 80% of the re4spondent said the office
that in the office there is insufficient man power where as the other 20% of the
respondents said that it is not organized.
 The main reason for this problem is lack of required capital to hire new employee, low
scale of salary and motivation for the existing employee in the assessment.

Table 8 Is there any computerized way of the tax levying and collection system in the
organization

Question Total number of respondents Percentage of respondents

Is there any computerized way 10 Yes ------------------------ 20%

of the tax levying and
 collection system in the No ------------------------- 80%
organization
Source: survey result

From the above table 14, 80% of the respondents started that there is no computerized way of the
tax levying and collection system in the office where as the remaining 20% said that there is a
computerized way of tax levying and collection system, from this point the researcher can say
that there is no computerized system in the office. This is due to

 The office does not have the required financial resource

 Absence of skilled personnel
Table 9 Who is responsible for effectiveness of tax assessment and collection

Question Gender Total number of Percentage of

respondents respondents

Who is responsible for Male Female

effectiveness of tax
5 5 10 The policy-----0%
assessment and
collection Tax payers---40%
Tax office-----60%

Source: survey result

According to the information gathered 60% of the respondents said that tax officials is the
responsible body for effectiveness of tax assessment and collection where as the other 40% said
that the tax office, the policy and taxpayers are respondents said that the tax office is responsible:

 There to conduct perpetual capacity building to employees

 Failure to conduct perpetual capacity building to employees
 Lack of knowledge about who is responsible
Table 10 How do you present the taxation system

Question Total number of Percentage of

respondent responses

How do you present the 20 Good --------------------------20%

 taxation system Not bad------------------------40%

Needs reform----------------40%

Source: survey result

 Even though around 60% of the respondents accept the present taxation system 40% of
the other respondents are not agreed on the structure. 40% of the respondent stated that it
needs reforms. The reform for the system is done when the system is not participatory;
there is discrimination in practice, the structure is not followed the stated principles, rules
and regulations.

Table 11 How do you Understand taxation

Question Total number of Percentage of

respondent responses

How do you 20 As an obligation---40%

Understand taxation As debt----------------

As useful---------------60%

Source: survey result

Responses of taxpayers in the above table 1, around 40% of the respondent understand taxation
as an obligation. This is due to poor understood and lack of awareness about the purpose and
concept of taxation.

Table 12 Do the taxpayers pay the tax liability on the time

Question Total number of respondents Percentage of respondents

Do the taxpayers pay the tax 10 Yes ------------------------- 40%

liability on the time?
No -------------------------- 60%
Source: survey result
As indicated in the above table 15, most of the respondents 60% said that the taxpayers do not
pay their liability on time. The main reasons for this:

 Employee of the office do not have the knowledge how the office collect tax due to
lack of experience
 Absence of computerized system of doing their tax
 Lack of awareness in their taxpayers when they pay tax

Table 13 Does the office makes any structure adjustment to make their tax more effectives

Question Total number of respondents Percentage of respondents

Does the office make any 10 Yes ------------------------- 20%

structure adjustment to make
their tax more effectives No -------------------------- 80%

Source: survey result

From the above table 16, 80% of respondents said that the office does not make any structure
adjustment where as the remaining 20% said that the office makes any structure adjustment to
make the tax efficient. This Due to:

 Lack of good management system in the office

 Lack of skilled man-power

3.5. To identify the main source (areas) for the tax revenue of Adwa town

Table 14 How do you levying tax on the taxpayers

Question Gender Total number Percentage of respondents

of
respondents

How do you Male Female

levying tax on 7 3 10 Using authoritative judgment---20%
 the taxpayers? Analyzing the financial statement--80%
As the taxpayers want------0%

Source: survey result

From the above table 11 around 80% of employee said that when levying tax they analyze the
financial statement of taxpayers.

Whereas 20% of respondent said that using authoritative judgment. However, they provide their
comment in the space provided most of time use authoritative judgment. These problem results
from the taxpayer are not willing to prepare the financial statement.

3.5. To assess the awarness of Adwa town employee to collect tax

Table 15 How do you evaluate the co-ordination of your offices with other employee of
the organization

Question Gender Total number of Percentage of

respondents respondents

How do you evaluate Male Female

the co-ordination of 4 6 10 Excellent--------20%
your offices with other Very good-------60%
employee of the Good-------------20%
organization?

Source: survey result

As shown in table 12 above, 60% of the respondents states that the co-ordination of the offices
with other employee are very good , 20% it is good but 20 %is excellent.

Table 16 Do you think that the present tax structure initiate the people to save, worth and
investment

Question Total number of Percentage of

respondent responses
 Do you think that the present 20 Yes-------------------------60%
tax structure initiate the people
to save, worth and investment? No-------------------------40%

Source: survey result

Based on information gathered through questionnaires in the above table 60% tax payers
agree on the present tax structure initiates people to save, work and investment. But the other
40% do not agree with this idea. This due to

 The office does not consider the new taxpayers ability to pay tax
 The office does not give any supporting things for the new commerce in the business
like tax cancelation

Table 17 Do you believe that you annual tax liability is based on your income

Question Total number of Percentage of

respondent responses

Do you believe that you annual 20 Yes-----------------------------60%

tax liability is based on your
income? No-------------------------------40%

Source: survey result

From the information gathered through ‘Yes’ or ‘No’ question, around 40% of the respondents
believe the amount of their tax liability is not based on their ability to pay tax. The reasons for
such problem are:

 Their daily save is estimated over and above their income

 The taxpayers do not have accounting records
 The limitation of the business
 They have low attitude towards tax by taxpayers
 The office does not properly analyze the ability of taxpayers or office may have a corrupt
official that judge the amount of tax and payment.