Abstract:
Government expenditures to provide service for the general public should be financed from different source and uses different sources of finance for its expenditure like tax, borrowing donation, fees, fines and others. Business income taxes were one part of tax which imposed on taxable business income /net profit/ realize from entrepreneurial activity. The tax collection process on business income tax collection on category "C" tax payers should be followed by tax administration properly. To administer the process of business income tax collection system on category "C" tax payers properly the tax collection system should be aware by tax payers, and tax officials should be skilled. In order to cover its expenditures effectively government should identify and point cut the main problems in tax collection procedure and assessment especially in business income tax on category "C" tax payers. The main objective of this study was to investigate tax assessment and collection problems in respect of category "C" taxpayers found in Mekane eyesus town. Both semi structured interview and questionnaire techniques were employed to investigate the existing problems in business income tax administration of the selected town. As shown the authority of tax official response the authority properly apply administrative penalty on the tax payers who were not able to pay on schedule period of time. But as respondents showed there was also a problem on applying administrative penalty. Even if tax administration performance was improve from year to year tax payers service delivery has reached to some extent because of commitment of tax officials in their work. Less awareness creation program to tax payers and revenue authority face, the following five issues were pointed out as major business income tax administration problem existed between the tax payers and tax authority in Mekane eyesus revenue authority these were, shortage of information about the tax system, majority of tax payers in Mekane eyesus town had low awareness about the low and regulation of tax, Lack of training to the tax payers. In effective administration on tax collection process and insufficient number of tax official.
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