International Journal of Academic Multidisciplinary Research (IJAMR)   Year: 2020 | Volume: 4 | Issue: 12 | Page No.: 94-103 Challenges of Value Added Tax Collection in Amhara Regional State, Ethiopia Nigatu Mengesha Fentaw Abstract: Almost all over the world with the exception of some countries, indirect taxes are the leading constituent parts of government revenue, which support government expenditure. From indirect taxes, Value Added Tax plays an important role. However, governments have faced different challenges about taxation, and they vary in the methods of collecting taxes. In Amhara National Regional State, Ethiopia Value Added Tax (VAT) is one source of revenue. However, various challenges arise because of different problems that has been able to deter the collection system and administration. Descriptive research method and purposive sampling techniques employed with Statistical Package for Social Science (SPSS) version 26 software for the process of the analysis. Respondents who have been participated in the study were customarily VAT registered taxpayers in Metropolitan cities. This research discusses the challenges of Value Added Tax collection in Amhara National Regional State, Ethiopia. The study revealed that service delivery problems, financial statement reports which are not audited on time, invoicing or receipt provision problems and sales register machine problems (technology applications), and rewarding and encouraging systems are the main challenges of the VAT system. Based on the findings, the study suggested that providing resources to make a convenient environment for service delivery; upgrading employees' skills through short and long-term training, and Annual financial statements reports should be audited on time by capacitating tax auditors. In addition, Change the SIGTAS system with other technology to manage VAT invoicing transactions and Sales register systems. Receipts or invoices should continuously be monitored, and taxpayers should give receipts to customers. Finally, the main problems of the refund management system need further research to solve complaints of taxpayers sustainably.