Awareness, knowledge and perception of tax payers towards value added tax (vat) administration in yirgalem town, sidama zone, Snnpr State, Ethiopia

The study was undertaken with the main objective of assessing the practices and challenges of VAT administration in Yirgalem Town Administration. Both primary and secondary data were deployed for the study purpose. Yirgalem Town Administration was selected purposively as the study area. By adopting simple random basis 83 tax payers selected as sample respondents. Structured questionnaire was prepared to collect primary data from the tax payers. Simple statistical tools such as frequency table and percentages were used for data analysis and interpretation. The findings of the study show that majority of the respondents do not aware about the intricacies of VAT administration and thus having poor knowledge. However, more than 70 percent of the respondents perceived that VAT has helped them to increase sales, turnover, price reduction, revenue to government and ease of accountability. Most of the respondents perceived that there was an improvement in VAT collection and their profession. Nonetheless, majority of the respondents disagreed on the service delivery mechanism of Yirgalem Revenue and Customs Branch Office. As to challenges majority of the respondents perceived that VAT leads to maintain unnecessary documents, increase in operational expenses, involves more paper work, complicated procedure, burden to customers, difficult to administration and poor institutional capacity.