An Analytical Study of Awareness and Challenges towards Tax System in Developing countries- with special reference to Debre Markos Town, Ethiopia

Every government requires funds for the performance of its various functions. The main sources of financing government expenditure are taxations. Especially developing countries like Ethiopia are used to raise revenue collection from tax for their economic development. One of the major aim of the tax system in Ethiopia is to maximize domestic revenue by collecting sufficient taxes. To achieve this, the Ethiopian government creates different tax reform programs and the reform improved the application of business income tax with more simplified standard assessment methods of presumptive taxes. This study is an attempt to identify the efforts done by govt. for collecting the tax with the help of Statistical tool- Multiple regression analysis which reveals that tax assessment affects the tax collection performance. Thus, it can be concluded that the tax law enforcement has its own contribution to tax collection performance and the revenue authority of the town should consider as of the other predictors.