THE EFFECT OF TAX EVASION AND AVOIDANCE ON TAX REVENUE: THE CASE OF NORTH SHOA ZONE OF OROMIA REGIONAL STATE REVENUE AND CUSTOMS OFFICE

The general objective of the study is to assess the effect of tax evasion and avoidance on tax revenue in North Shoa Zone of Oromia Regional State. The present research was conducted in order to see, the impact of tax law enforcement, tax morale, tax rate and tax awareness on the degree of tax revenue in the in North Shewa of Oromia Regional State. The study included these variables tax law enforcement, tax morale, tax rate and tax awareness, to see their effect on tax revenue. The study used to quantitative survey, questionnaire and documentary analysis. The study out of the total – business tax payers and tax officers were selected and Purposive and stratifying random sampling techniques were used by Taro Yamane formula is used to determine the sample size. According to the finding of the study concluded that the tax law enforcement, tax morale, tax rate and tax awareness of the tax evasion and avoidance have significant and positive effect on the tax revenue. The magnitudes of relationship between the four variables are very strong. Compared to other relationship considered in this study, tax rate and tax awareness are ranked first, tax law enforcement is ranked third and tax morale is ranked fourth in its magnitude of correlation. Based on the findings of the study and conclusions made, the study forwarded recommendations so that the North Shoa Zone of Oromia Regional State can enhance the Tax Revenue.