Abstract:
Ethiopian Government tries to provide basic service to its citizens. In order to deliver these services there is no doubt of the need of having source of income as a Government. Revenue from tax recognized as a basic source of income for the government. Tax divided in to two main categories, which known as direct and indirect tax. Value Added Tax (VAT) is one type of indirect tax that became the most important and basic source of income for Ethiopia like other most countries. Ethiopia has started implementing Vat in January 2003 with the rate of 15%, which is moderate in comparison of with most world countries. Dire Dawa City Administration is one of the nine regional states and two city administrations of the country. This study conducted with major objective of Analyzing Value Added Tax Collection System of the Dire Dawa Administration Revenue Authority. The data used for this study collected though structured questionnaire interview and relevant documents and analyzed using descriptive statistics, compering means, and regression analysis. The findings show that VAT collection system is directly related with identification of potential VAT payers, long queues in payment time, employees service delivery ethics, employee competence and awareness creation mechanisms from taxpayers’ side. On the other hand, from implementers side capacity of employees, ability of decision making, commitment of VAT collectors are significantly affect the VAT collection system. Finally, based on findings the study, possible recommendation have given. These include deep awareness creation, widening the base from which the VAT is collecting, arranging convenient schedule for VAT payers and continues capacity-building program for customers serving employees (especially front desk employees) how to admit VAT payers.
