TAX AUDIT PRACTICE AND ITS SIGNIFICANCE IN INCREASING REVENUE: THE CASE OF BALE ROBE TOWN ADMINISTRATION

The purpose of this study was to investigate tax audit practice and its significance in increasing
revenue in Ethiopia in case of bale Robe town administration. This research work can give
feedback to tax payers and the tax authority regarding the significance, application and practice
of tax audit. The study also contributes in evaluating the prevailing tax audit practice and in
making some adjustments on the existing tax audit systems. The researcher used a quantitative
and qualitative research paradigm or the mixed research approach in integrated way since the
primary goal of this research is to gain a better understanding of tax audit practice and its
significance in increasing revenue in bale Robe town administration, it is impressive that the
results obtained were generalizable to different types of organizations. As a result, the study
adopted an explanatory research design which explains the tax audit practice and its
significance in increasing revenue in bale Robe town administration. In this study the researcher
used stratified random sampling because the technique requires dividing the population in to sub
categories or strata before conducting the sample. The study used both primary and secondary
data which were collected from Robe town administration. Tax audit should be carried out on a
routine basis to ensure that actual revenue collected is what the relevant tax authority remits to
the government. Regarding the impact of tax Audit on reduction of Tax Evasion and other
fraudulent intensions, the survey indicated that the respondents are in agreement with the impact
of tax Audit on reduction of Tax Evasion and other fraudulent intensions are high. Facilitation
and Control, Increasing compliance, Bad auditing experience and Fear of Audit are issues which are raised as a result of tax audit which helps to reduce tax evasion.2