This study examines the effect of tax audits on improving taxpayers compliance in the context of the Dilla Town Revenue Office. It investigates five determinants influencing compliance:- tax education, tax rate, audit quality, top management support, and the tax legislation system. An explanatory research design is employed, utilizing quantitative approaches, with data collected through questionnaires from 250 tax office employees. The census method was employed to select respondents and a total of 250 tax office employees participated. The analysis employs descriptive and inferential statistics, including ordinal logistic regression using SPSS software. The findings reveal that tax education, tax rate, and the tax legislation system have significant positive impacts on compliance. Conversely, audit quality and top management support negatively influence compliance levels. Implement regular training sessions and workshops for taxpayers to increase awareness of tax obligations and the benefits of compliance. Invest in training for tax auditors to ensure they are well-equipped to conduct thorough and fair audits, utilizing modern tools and technologies. Review and simplify tax laws to make them more accessible and understandable for taxpayers, thus reducing confusion and errors in compliance. Conduct periodic evaluations of tax rates and policies to ensure they remain fair and conducive to compliance, making adjustments as necessary to reflect economic conditions.
Jebo Tesfaye Chebeso (Mon,) studied this question.