CHAPTER ONE

Introduction 1.1 Background of the Study

Organizations are established to accomplish their goals and objectives effectively and efficiently. They are concerned about both their own effectiveness and the role they play in the society. It is fair to realize that distributed the resource equally and growth depends on their ability to adapt the changing environment through strategic thinking which is called organizational development or strategic planning. Ethiopian revenues and customs authority Akaki Kality sub-city small tax payers branch office is one of revenues collecting branch. After tekmet/October,2003 EC Addis Ababa city

administration of revenues authority agreed with the federal democratic republic of Ethiopian revenue and customs authority in order to work together to satisfy the citizen need. Even though the collected money is totally delivered to Addis Ababa city administration of revenues authority as usually previously done. But the main reason to works together with Ethiopian revenues and customs authority is adapted the structure and technical skill transferring in the process of collecting tax so in Addis Ababa each of 10 sub-city is administrated by Addis Ababa city administration of revenues authority and the collected tax from each of 10 sub-city delivered to Addis Ababa city administration but they apply the structure and techniques of Ethiopian revenues and customs authority. Akaki Kality sub-city small tax payers branch office is administrated 11 Wordas but in this time only 8 are functional. This small tax payers branch office has 185 employees and all are intended

by performed different task, like collecting the tax of house and land, turn over tax, value add tax (in each of month),pension and etc. In this organization for long years different works are performed by one person but now this organization had 6 fundamental sectors:The 1st sector task is tax collecting and levied. The 2nd sector task is tax audit. The 3rd sector task is financial administration. The 4th sector task is information desk technical. The 5th sector task is related to customer service. The 6th sector task is keeping collecting tax by legal right.

1.2 Statement of the problem

When an institution was established, it has its own vision, mission and objectives, that directs to give the expected quality service without corruption, with in transparency and in a responsible way which can be trust between every citizen and government and also to satisfy the needs and interest of the citizen effectively and efficiently. Thus, it is expected from the leaders to keep the goal and objectives of the tax system and lead accordingly and honestly. Therefore, the collection of tax is supposed to carry out all its goal and objectives, which means their development is achieved. But, because of many reasons may it esteem from the citizen, the government policy or agency, lack of technology and ethics of tax worker the development plan are not fulfilled. So there are
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various problems that cause customer service dissatisfaction that was clearly described and listed below as follows: Prioritization of personal interest rather than community serving or lack of patriotism. Unbalanced or unfair tax levid on citizen without studied the income of commercial center or by estimation. Lack of awareness and understanding of the need of tax. The problem of modern technology and controlling system. Implementing directly developed country tax system rather than designing a system that considered and related with our commercial. Shortage of qualified workers and absence of necessary department.

1.3 Research Question

This study was mainly expected to find the right answer (responses) to the following questions:1. What are the main problems of customer dissatisfaction in the process of tax collection? 2. What are the main problems of cash registrar machine? 3. What are the main problems of quality service of akaki kality sub-city small tax payers branch office? 4. Does akaki kality sub-city small tax payers branch office has enough man power? 5. How was the overall performance of akaki kality sub-city small tax payers branch office gives satisfied and quality service for the tax payer?

1.4 Objectives of the study 1.4.1 General Objective

The general objective of this study was to discover and identify the reasons (causes) that attribute to customer dissatisfaction from the service of Akaki Kality sub-city small tax payers branch office.

1.4.2 Specific objective

- To know the process of tax collection and service of akaki kality sub-city small tax payers branch office. - To know the problems seen in both tax payer and collector. - To know in which service area dissatisfy of tax payers.

1.5 Significance of the study

The study is important to government, citizens, and to any interested party in the following ways. 1. It shows the service giving performance of akaki kality sub-city small tax payers branch office. 2. It states the problem of tax collection and the distribution of tax collection. This research study will solve the problem seen in both tax payer and collector that will help Ethiopian revenue and customs authority and akaki kality sub-city small tax payers branch office to enable to give quality service in the future.
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1.6 Limitation
In conducting this study, few limitations the researcher faced can be listed as: Not getting some necessary information, especially secondary source about the organizations. The new structure of the organization changing of employees position and the new employees of the organization are not well known about the past document of the organization. Because of shortage of time and financial constraints the collection of tax in this subcity is classified in each woreda. Even though administrated by low level tax payer branches of bearue. Because of the number of branch if will faced many things.

1.7 Research methodology

1.7.1 Research design:-in order to maximize the achievement of the research; I have used exploratory method of design that assisted the research to dig out the root causes of dissatisfied tax payers within services of akaki kality sub-city small tax payers branch office. Further more both qualitatively and quantitatively approaches were included which in fact they had great role in acquiring the necessary primary data from targeted respondents. 1.7.2 Sampling technique:- This study was conducted in Addis Ababa specifically Akaki Kality area. Akaki kality is the most industrialized area of Ethiopia. The town is one of the sub towns of the capital city of Addis Ababa. It is found 25 KM away from the center of Addis Ababa to the South. In this research work involved 50 respondents from tax payers, selected by simple random
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sampling and 6 Akaki Kality sub-city small tax payers branch office workers was selected by purposive sampling technique. 1.7.3 Method of data collection:- The data needed were obtained from the primary sources, the primary data is obtained by using personal interview and questioner methods. For both methods, the researcher select the respondents from those the whole tax payer and worker of Akaki kality sub-city small tax payers branch office. The selection was made by using purposive sampling technique for interviewed the worker and simple random sampling for respondents of tax payer in akaki kality sub-city.

A. Interview Method
Interview method was one of the methods used by the researcher to collected data from workers of Akaki Kality sub-city small tax payers branch office. The reasons behind used interview method included More information in great depth can be obtained. If any resistance happened from respondent it enabled the interviewers tackled by their own skill. It was possible to collected supplementary information. Miss interpretation of the answer for the questions was easily avoided. In this interviews method, there were about 6 respondents from selected workers of Akaki Kality sub-city small tax payers branch office the sampling technique here was purposive sampling technique. This technique enabled the research to selected respondent that he/she thinks best fit to the questions.

B. Questionnaire Method
Questionnaire Method was the other method that i used in this study. The reasons behind used this method was: Enabled the researcher to collect the data from large number of respondents. The respondents feel free to write their response on the paper. In this method the researcher used tax payers of Akaki kality sub-city small tax payers branch office .here the 50 respondents was selected from different trade in akaki kality sub-city by simple random sampling technique. The secondary sources and observation were also means in acquiring relevant data. Journals were in use, I have also to review the literature with regard to the topic of research. Generally I tried to improve repeatedly all the techniques for the better achievement of the outcome.

1.8 organization of the paper

The paper comprises four chapters. The first chapter contains back ground of the study, statement of the problem, objective of the study, significance of the study and research methodology. The second chapter contains review of earlier studies related to the topic of the study. The third chapter presents the analysis and interpretation of the study. Finally in the fourth chapter conclusion and recommendation will be followed.

CHAPTER TWO LITERATURE REVIEW

2. Major Types of Taxes existing in Ethiopia 2.1 Direct Taxes
2.1.1 Tax on Income from Employment / Personal Income Tax Every person deriving income from employment is liable to pay tax on that income at the rate specified in Schedule Aas follows: Employment Income
(per month)

Tax rate(in %) To Birr 150 650 1,400 2,350 3,550 5,000

Deduction
(in Birr)

Over birr 0 151 651 1,401 2,351 3,551 Over 5,000

Exempt threshold 10% 15% 20% 25% 30% 35%

15.00 47.50 117.50 235.00 412.50 662.00

Table 2.1 personal income tax Example: Computation of Personal Income Tax Monthly Salary of 500.00 Birr - Personal Income Tax = 500 Birr x 10% tax rate = 50 Birr - Deduction = 50 Birr - 15 Birr deduction fee - Tax payment = 35 Birr Employment income shall include any payments or gains in cash or in kind received from employment by an individual. Employers have an obligation to withhold the tax from each payment to an employee, and pay the Tax Authority the amount withheld during each calendar

month. In applying the procedure, income attributable to the months of Nehassie and Pagume shall be aggregated and treated as the income of one month. (ECC and EBDSN ,2005,p.3) If the tax on income from employment, instead of being deducted from the salary or wage of the employee, is paid by the employer in whole or in part, the amount so paid shall be added to the taxable income and shall be considered as part thereof.(Ibid) The following categories of income shall be exempt from payment of personal income tax: Income from employment received by casual employees who are not regularly employed provided that they do not work for more than one month for the same employer in any twelve months; Pension contribution, provident fund and all forms of retirement benefits contributed by employers in an amount that does not exceed 15% of the monthly salary of the employee; Subject to reciprocity, income from employment, received for services rendered in the exercise of their duties by diplomatic and consular representatives, and other persons employed in any Embassy and who are national of that state and bearers of diplomatic passports; Payments made to a person as compensation or a gratitude in relation to personal injuries suffered by that person or death of another person; Amounts paid by employers to cover the actual cost of medical treatment of employees; Allowances in lieu of means of transportation granted to employees under contract of employment; Hardship allowance; Amounts paid to employees in reimbursement of traveling expenses incurred on duty; Amounts of travelling expense paid to employees recruited from elsewhere than the place of employment on joining and completion of employment or in case of foreigners travelling expenses from or to their country, provided that such payments are made pursuant to specific provisions of the contract; Allowance paid to members and secretaries of board of public enterprises and public bodies as well as to members and secretaries of study groups set up by the Federal or Regional Government;
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Income of persons employed for domestic duties.

2.1.2 Business Profit Tax This is the tax imposed on the taxable business income / net profit realized from entrepreneurial activity. Taxable business income would be determined per tax period on the basis of the profit and loss account or income statement, which shall be drawn in compliance with the generally accepted accounting standards. Corporate businesses are required to pay 30% flat rate of business income tax. For unincorporated or individual businesses the business income tax ranges from 10% - 35%. Unincorporated or individual businesses are taxed in accordance with the following schedule below:
Schedule c Taxable business income/ Net profit per year Over Birr 0 1801 7801 16801 28201 42601 Over 60,000

Tax Rate(In %) To Birr 1800 7800 16800 28200 42600 60000

Deduction (In Birr)

Exempt threshold 10% 15% 20% 25% 30% 35%

180.00 570.00 1410.00 2520.00 4950.00 7950.00

Table2.2 Business profit tax Example: Computation of business profit tax Business Net Profit per year/Taxable Income = 70,500.00 Birr - Business Profit Tax = 70,500 Birr x 35% tax rate = 24,675 Birr - Deduction = 24,675 Birr - 7,950 Birr deduction fee - Tax payment = 16,725.00 Birr In the determination of business income subject to tax in Ethiopia, deductions would be allowed for expenses incurred for the purpose of earning, securing, and maintaining that business income to the extent that the expenses can be proven by the taxpayer. (Ibid) The following expenses shall be deductible from gross income in calculating taxable income:
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The direct cost of producing the income, such as the direct cost of manufacturing, purchasing, importation, selling and such other similar costs; General and administrative expenses connected with the business activity; Premiums payable on insurance directly connected with the business activity; Expenses incurred in connection with the promotion of the business inside and outside the country, subject to the limits set by the directive issued by the Minister of Revenue; Commissions paid for services rendered to the business; Sums paid as salary, wages or other emoluments to the children of the proprietor or member of the partnership shall only be allowed as deduction if such employees have the qualifications required by the post.

The following categories of income would be exempted from payment of business income tax: Awards for adopted or suggested innovations and cost saving measures; Public awards for outstanding performance; Income specifically exempted from income tax by the law in force in Ethiopia, by international treaty or by an agreement made. Penalty for understatement of tax: If the amount of tax shown on a declaration understates the amount of tax required to be shown, the taxpayer is liable for a penalty in the amount of 10% of the understatement or 50% if the understatement is considered substantial. The understatement is considered substantial if it exceeds 25% of the tax required to be shown on the return or 20,000 Birr; The penalty shall continue to apply until, the Appeal Commission or a Court, as the case may be shall have rendered its final decision. Penalty for late payment: A taxpayer who fails to pay tax liability on the due date is subject to: A penalty of 5% of the amount of unpaid tax on the first day after the due date has passed; and An additional 2% of the amount of tax that remains unpaid on the first day of each month thereafter. (Ibid)

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2.1.3 Tax on Income from Rental of Buildings This is the tax imposed on the income from rental of buildings. If the taxpayer leased furnished quarters, the amounts received attributable to the lease of furniture and equipment would be included in the income and taxed. (Ibid) Example: Computation of Rental Income Tax Net profit per-year/Taxable Income 38, 000.00 Birr - Rental Income Tax = 38,000 Birr x 25% tax rate = 9,500 Birr - Deduction = 9,500 Birr -2,820 Birr deduction fee - Tax payment = 6,680 Birr Conditions of payment: The owner of a building who allows a lessee to sub-lease is liable for the payment of the tax for which the sub-lessor is liable, in the event the sub-lessor fails to pay; When the construction of a rental building is completed or when the building is rented, the owner and the builder are required to notify the administration of the Kebele in which the building is situated about such completion and the name, address, and tax identification number of the person or persons subject to tax on income from rental of building; The Kebele administration has the obligation to communicate the information obtained to the appropriate tax authority.

2.1.4 Tax on Interest Income on Deposits Every person deriving income from interest on deposits shall pay tax at the rate of 5%. The payers are required to withhold the tax and account to the Tax Authority. (Ibid)

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2.1.5 Dividend Income Tax Every person deriving income from dividends from a share company or withdrawals of profits from a private limited company shall be subject to tax at the rate of 10%. The withholding agent shall withhold or collect the tax and account to the Tax Authority. (Ibid) 2.1.6 Tax on Income from Royalties Royalty incomemeans a payment of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematography films, and films or tapes for radio or television broadcasting. Royalties income shall be liable to tax at a flat rate of 5%. The withholding agent who effects payment shall withhold the foregoing tax and account to the Tax Authority. Where the payer resides abroad and the recipient is a resident, the recipient shall pay tax on the royalty income within the time limit set out. (Ibid) 2.1.7 Tax on Income from Games of Chance Every person deriving income from winning of games of chance (e.g., lotteries, tombolas, and other similar activities) shall be subject to tax at the rate of 15%, except for winning of less than 100 Birr. The payer shall withhold or collect the tax and account to the Tax Authority. (Ibid) 2.1.8 Tax on Gains of Transfer of Certain Investment Property This is the tax payable on gains obtained from the transfer (sale or gift) of building held for business, factory, office, and shares of companies. Such income is taxable at the following rates: Building held for business, factory, and office at the rate of 15%; Shares of companies at the rate of 30%.

Gains obtained from the transfer of building held for residence shall be exempted from tax provided that such building is fully used for dwelling for two years prior to the date of transfer. Any person authorized by law to accept, register or in any way approve the transfer of capital assets shall not accept, register or approve the transfer before ascertaining that the payment of the tax has been duly effected. (Ibid)

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2.1.9 Tax on Income from Rental of Property The taxable income under this category is income derived from casual rental of property (including any land, building, or moveable asset) not related to a business activity. This type of income is subject to tax at a flat rate of 15% of the annual gross income. (Ibid)

2.2 Indirect Taxes

2.2.1 Turnover Tax The Turnover Tax would be payable on goods sold and services rendered by persons not registered for Value Added Tax. The rate of Turnover Tax is 2% on goods sold locally; for services rendered locally: o 2% on contractors, grain mills, tractors and combine-harvesters; o 10% on others. The base of computation of the Turnover Tax is the gross receipts in respect of goods supplied or services rendered. A person who sells goods and services has the obligation to collect the Turnover Tax from the buyer and transfer it to the Tax Authority. Hence, the seller is principally accountable for the payment of the tax. In accordance with the Turnover Tax Proclamation No. 308/2002, the following would be exempted: Sale or transfer of dwelling used for a minimum of two years, or the lease of a dwelling; Rendering of financial services; Supply of national or foreign currency and of securities; Rendering by religious organizations of religious or other related services; Supply of prescription drugs specified in directives issued by the relevant government agency, and the rendering of medical services; Rendering of educational services provided by educational institutions; Supply of goods and rendering of services in the form of humanitarian aid; Supply of electricity, kerosene and water; Provision of transport; Permits and license fees;
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Supply of goods or services by a workshop employing disabled individuals (if more than 60% of the employees are disabled); Supply of books.

Assessment of the Tax If after review by the Tax Authority, it appears that a person has understated his tax obligation, the Authority can issue an additional assessment; If, for any reason, the books of account are unacceptable to the Tax Authority, or if the tax payer fails to submit same when requested by the Authority, or if no books of account and supporting documents are maintained, the Tax Authority would assess the tax on the basis of information available; A presumptive turnover tax would be payable by Category Ctaxpayers who are not required to keep records. The base for the presumptive turnover tax would be the total turnover used as base for the income tax; The assessment made would be prepared in an assessment notification and be delivered to the taxpayer; If the Authority makes an additional assessment and within 30 days of notice the person assessed does not pay the additional assessment or appeal the assessment the person is in default; If the Tax Authority fails to assess the tax and notify the taxpayer of the amount still due within five years from the date of declaration and payment of the tax by the taxpayer the tax so paid would be final and conclusive. In case where the taxpayer has not declared his income or has submitted a fraudulent declaration, no time limit provided in any other law shall bar the assessment of the tax by the Tax Authority.

Notification of Changes A registered taxpayer is required to notify the Tax Authority: Any change in the name, address, place of business, constitution, or nature of the principal taxable activity or activities of the person;
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Any change of address from which, or name in which, a taxable activity is carried on by the registered person, with in 21 days following such change.

Tax Evasion A person who evades the declaration or payment of tax, commits an offence and in addition to any penalty may be prosecuted and be subject to a term of imprisonment of not less than five (5) years. If any amount of tax is not paid by the due date, the person liable is obliged to pay interest on such amount for the period from the due date to the date the tax is paid. The interest rate is set at 25% over and above the highest commercial banks lending interest rate that prevailed during the preceding quarter. A person who fails to file a timely return is liable for a penalty equal to 5% of the amount of tax underpayment for each month (or portion there of) during which the failure continues, up to 25% of such amount. The penalty is limited to 50, 000 Birr for the first month in which no return is filed. (ECC and EBDSN ,2005,p.12) 2.2.2 Excise Tax It is believed that this tax should be imposed on luxury goods and basic goods, which are demand inelastic. It is also believed that imposing the tax on goods that are hazardous to health and which are causes to social problems will reduce the consumption thereof.(Ibid) Rate of Excise tax: The excise tax would be imposed on goods imported or either produced locally in accordance with the following schedule, given in Excise Tax Proclamation No. 307/2002. The base of computation of Excise Tax is the cost of production for goods produced locally; where as for goods imported the base of computation would be the cost of production, insurance and freight costs. Obligations of the taxpayer: Maintaining books of accounts and supporting documents in accordance with proper accounting principles and in a manner acceptable to the Tax Authority;
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Submit every 30 days to the Tax Authority, in a form which would be supplied by the Authority, a declaration containing the necessary information for the proper collection of the tax;

Comply fully with the requirements of inspection of his premises by the delegates of the Tax Authority; Immediately communicate to the Tax Authority the type and address as well as the commencement and termination date of his business; Pay in full the tax due within 30 days from the date of termination where such business is terminated.

Regarding goods imported the Tax Authority can sell such goods where the tax in respect of them is not paid within six months from the day of deposit within the premises of government warehouse, or in the case of perishable goods. Notification of Change Every taxpayer should notify the Tax Authority of: Any change in the name, address, place of business, constitution, or nature of the principal taxable activity or the activities of the person; Any change of address from which, or name in which, a taxable activity is carried on by the taxpayer, with in 5 days of the change occurring.(Ibid) 2.2.3 Value Added Tax (VAT) VAT is a tax on consumer expenditure. It is collected on business transactions and imports. A taxable person can be an individual, firm, company, as long as such a person is required to be registered for VAT. (ECC and EBDSN ,2005,p.15) Most business transactions involve supplies of goods or services. VAT is payable if they are: Supplies made in Ethiopia; Made by a taxable person; Made in the course or furtherance of a business; Are not specifically exempted or zero-rated.

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The Value Added Tax would be levied at the rate of 15% of the value of: Every taxable transaction by a registered person; Every import of goods, other than an exempt import; and Import of services.

A person who carries on taxable activity and is not registered is required to file an application for VAT registration with the Authority if: At the end of any period of 12 calendar months the person made , during that period, taxable transactions the total value of which exceeded 500,000 Birr; or At the beginning of any period of 12 calendar months there are reasonable grounds to expect that the total value of taxable transactions to be made by the person during that period will exceed 500,000 Birr.

Registration procedure: A person applying to register for VAT is required to do so in such a form as is established by the implementation directives issued by the Ministry of Revenue; When a person carrying out taxable transactions files an application to be registered for VAT, the Authority is required to register the person in the VAT register, and to issue a certificate of registration within 30 days of the registration; A person registered for VAT is required to use his taxpayer identification number on all VAT invoices, and on all tax returns and official communications with the Authority. There is a VAT invoice prepared by the Ministry of Revenue containing the following information: Full name of the registered person and the purchaser, and the registered; Persons trade name, if different from the legal name; Taxpayer identification number of the registered person and the purchaser; Number and date of the VAT registration certificate; Name of the goods shipped or services rendered; Amount of the taxable transaction; Amount of the excise on excisable goods;
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Sum of the VAT due on the given taxable transaction; Issue date if the VAT invoice, and Serial number of the VAT invoice.

The registered person is required to issue the VAT invoice to the purchaser of goods or services upon the supply or rendering, but not later than 5 days after the transaction.(Ibid) Record Keeping Requirement: A registered person or any other person liable for VAT under the proclamation shall maintain for 10 years in Ethiopia: Original tax invoices received by the person; Copy of all tax invoices issued by the person; Customs documentation relating to imports and exports; Accounting records; and Any other records as may be prescribed by the Minister of Revenue by directive.

Administrative Penalties: The following penalties are imposed for violations of the VAT Proclamation: Where any person engages in taxable transactions without VAT registration where VAT registration is required 100%of the amount of tax payable for the entire period of operation without VAT registration; Where any person issued incorrect tax invoice resulting in a decrease in the amount of tax or increase in accredit or in the event of the failure to issue a tax invoice 100%of the amount of tax for the invoice or the transaction; Where a person who is not registered for VAT issues a tax invoice a penalty of 100%of the tax which is indicated in the tax invoice and is due for transfer to the budget but has not been transferred; and Where a person fails to maintain records required 2,000 Birr for each month or portion thereof that the failure continues.

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A person who fails to file a timely return is liable for a penalty equal to 5% of the amount of tax underpayment for each month (or portion thereof) during which the failure continues, up to 25% of such amount. The penalty is limited to 50,000 Birr for the first month (of portion thereof) in which no return is filed. If any amount of tax is not paid by the due date, the person liable is obliged to pay interest on such amount for the period from the due date to the date the tax is paid. The interest is set at 25% over and above the highest commercial lending interest rate that prevailed during the preceding quarter. The following types of supplies of goods (other than by way of export) or rendering of services, as well as the following types of imports of goods are exempt from payment of VAT: Sale, transfer or the lease of a used dwelling; Rendering of financial services; Supply/import of national/foreign currency and of securities; Import of gold to be transferred to the National Bank; Rendering of religious organizations or church services; Import or supply of prescription drugs specified in directives issued by Minister of health, rendering of medical services; Educational services provided by educational institutions, or child care services for children at pre-school institutions; Supply of goods and rendering of services in the form of humanitarian aid, as well as import of goods transferred to state agencies of Ethiopia and public organizations for the purpose of rehabilitation after natural disasters, industrial accidents, and catastrophes; Supply of electricity, kerosene, and water; Goods imported by the government, organizations, institutions or projects exempted from duties and other import taxes to the extent provided by law or by agreement; Supplies by the post office authorized under the Ethiopian Postal Services Proclamation, other than services rendered for a fee or commission; Provision of transport; Permits and license fees; Supply of goods or services by a workshop employing disabled individuals if more than 60 % of staff are disabled; Import or supply of books and other printed materials.
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2.2.4 Customs Duty Any good imported or exported would be subject to: Payment of duties and taxes according to the tariff of Harmonized Commodity Description and coding system; Payment of duties and taxes according to the preferential tariff rate where goods are imported from the preferred country; Payment of duties and taxes at the rate in force on the day the declaration of the goods are presented to, and accepted by the customs office.(Ibid)

2.3 Stamp Duty

The following instruments shall be chargeable with stamp duty: Memorandum and articles of association of any business organization, cooperative or any other form of association; Award; Bonds; Warehouse bond; Contract and agreements and memoranda; Security deeds; Collective agreement; Contract of employment; Lease, including sub-lease and transfer of similar rights; Notaries acts; Power of attorney; Documents of title to property.

2.4 Categories of Taxpayers

Taxpayers are classified into the following three major categories: 1. Category A Taxpayers This category of taxpayers includes: a) Any company incorporated under the laws of Ethiopia or in a foreign country;

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b) any other business having an annual turnover of Birr 500,000 or more. Category A taxpayers are required to submit to the Tax Authority, at the end of the year, a balance sheet and a profit and loss statement and the following details: a) Gross profit and the manner in which it is computed; b) general and administrative expense; c) depreciation expense; and d) provisions and reserves. In addition, these taxpayers should register with the Tax Authority the type and quantity of vouchers they use before having such vouchers printed. Any printing press before printing vouchers of taxpayers shall ensure that the type and quantity of such vouchers is registered with the Tax Authority. (ECC and EBDSN ,2005,p.27) 2. Category B Taxpayers Unless already classified in category A, any business having an annual turnover of over Birr 100,000 would be classified under Category B taxpayers. This category of taxpayers should submit to the Tax Authority profit and loss statement at the end of the year.(Ibid) 3. Category C Taxpayers Unless classified in Categories A and B, those businesses whose annual turnover is estimated up to Birr 100,000 are classified under this category of taxpayers.(Ibid)

2.5 Customer satisfaction

Those who buy the goods or services provided by companies are customers. In other words, a customer is a stakeholder of an organization who provides payment in exchange for the offer provided to him by the organization with the aim of fulfilling a need and to maximise satisfaction. Sometimes the term customer and consumer are confusing. A customer can be a

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consumer, but a consumer may not necessarily be a customer. Another author explained this difference. I.e. a customer is the person who does the buying of the products and the consumer is the person who ultimately consumes the product (Solomon, 2009, p. 34.) When a consumer/customer is contented with either the product or services it is termed Satisfaction. Satisfaction can also be a persons feelings of pleasure or disappointment That results from comparing a products perceived performance or outcome with their Expectations (Kotler & Keller, 2009, p. 789). As a matter of fact, satisfaction could be the pleasure derived by someone from the consumption of goods or services offered by another person or group of people; or it can be the state of being happy with a situation. Satisfaction varies from one person to another because it is utility. One mans meal is another mans poison, an old adage stated describing utility; thus highlighting the fact that it is sometimes very difficult to satisfy everybody or to determine satisfaction among group of individuals. Client happiness, which is a sign of customer satisfaction, is and has always been the most essential thing for any organization. Customer satisfaction is defined by one author as the consumers response to the evaluation of the perceived discrepancy between prior expectations and the actual performance of the product or service as perceived after its consumption (Tse & Wilton, 1988, p. 204) hence considering satisfaction as anoverall post-purchase evaluation by the consumer (Fornell, 1992, p. 11). Some authors stated that there is no specific definition of customer satisfaction, and after their studies of several definitions they defined customer satisfaction as customer satisfaction is identified by a response (cognitive or affective) that pertains to a particular focus (i.e. a purchase experience and/or the associated product) and occurs at a certain time (i.e. post-purchase, post-consumption). (Giese & Cote, 2000, p. 15) This definition is supported by some other authors, who think that consumers level of satisfaction is
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determined by his or her cumulative experience at the point of contact with the supplier (Sureshchander et al., 2002, p. 364). It is factual that, there is no specific definition of customer satisfaction since as the years passes, different authors come up with different definitions. Customer satisfaction has also been defined by another author as the extent to which a products perceived performance matches a buyers expectations (Kotler et al., 2002, p. 8). According to Schiffman & Karun (2004) Customer satisfaction is defined as the individuals perception of the performance of the products or services in relation to his or her expectations (Schiffman & Karun 2004, p. 14). In a nutshell,customer satisfaction could be the pleasure obtained from consuming an offer. Measuring customer satisfaction could be very difficult at times because it is an attempt to measure human feelings. It was for this reason that some existing researcher presented that the simplest way to know how customers feel, and what they want is to ask them this applied to the informal measures (Levy, 2009, p. 6; NBRI, 2009). Levy (2009, p. 6) in his studies, suggested three ways of measuring customer satisfaction: A survey where customer feedback can be transformed into measurable quantitative data: Focus group or informal where discussions orchestrated by a trained moderator reveal what customers think. Informal measures like reading blocs, talking directly to customers. Asking each and every customer is advantageous in as much as the company will know everyones feelings, and disadvantageous because the company will have to collect this information from each customer (NBRI, 2009). The National Business Research Institute (NBRI) suggested possible dimensions that one can use in measuring customer satisfaction, e.g:24

 Quality of service

Innocently

Speed

of service

pricing

Complaints

or problems

Trust

in your employees

The

closeness of the relationship with contacts in your firm of services needed clients minds

Other types

Your positioning in

There exist two conceptualizations of customer satisfaction; transaction-specific andcumulative (Boulding, et al., 1993; Andreassen, 2000). Following the transaction specific, customer satisfaction is viewed as a post-choice evaluation judgement of a specific purchase occasion (Oliver, 1980 ) until present date, researchers have developed a rich body of literature focusing on this antecedents and consequences of this type of customer satisfaction at the individual level (Yi, 1990). Cumulative customer satisfaction is an overall evaluation based on the total purchase and consumption experiences with a product or service over time. (Fornell, 1992, Johnson &Fornell 1991) This is more fundamental and useful than transaction specificity customer satisfaction in predicting customer subsequent behaviour and firms past, present and future performances. It is the cumulative customer satisfaction that motivates a firms investment in customer satisfaction.

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2.6 Service quality

In order for a companys offer to reach the customers there is a need for services. These services depend on the type of product and it differs in the various organizations. Service can be defined in many ways depending on which area the term is being used. An author defines service as any intangible act or performance that one party offers to another that does not result in the ownership of anything (Kotler & Keller, 2009, p.789). In all, service can also be defined as an intangible offer by one party to another in exchange of money for pleasure. Quality is one of the things that consumers look for in an offer, which service happens to be one (Solomon 2009, p. 413). Quality can also be defined as the totality of features and characteristics of a product or services that bear on its ability to satisfy stated or implied needs (Kotler et al., 2002, p. 831). It is evident that quality is also related to the value of an offer, which could evoke satisfaction or dissatisfaction on the part of the user. Service quality in the management and marketing literature is the extent to which customers' perceptions of service meet and/or exceed their expectations for example as defined by Zeithaml et al. (1990), cited in Bowen & David, 2005, p. 340) Thus service quality can intend to be the way in which customers are served in an organization whichcould be good or poor. Parasuraman defines service quality as the differences between customer expectations and perceptions of service (Parasuraman, 1988). They arguedthat measuring service quality as the difference between perceived and expected service was a valid way and could make management to identify gaps to what they offer as services. The aim of providing quality services is to satisfy customers. Measuring service quality is a better way to dictate whether the services are good or bad and whether the customers will or are

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satisfied with it. A researcher listed in his study: three components of service quality, called the 3 Ps of service quality (Haywood 1988, p. 19-29). In the study, service quality was described as comprising of three elements: Physical facilities, processes and procedures; Personal behaviour on the part of serving staff, and; Professional judgment on the part of serving staff but to get good quality service. Haywood 1988, p. 19-29).He stated that an appropriate, carefully balanced mix of these three elements must be achieved. (Haywood, 1988, p. 9-29) What constitutes an appropriate mix, according to him will, in part, be determined by the relative degrees of labour intensity, service process customization, and contact and interaction between the customer and the service process. From the look of things, this idea of his could be design to fit with evaluating service quality with the employee perspective. One of the most useful measurements of service quality is the dimensions from the SERVQUAL model. In the creation of this model for the very first time, Parasuraman et al. (1985) identified 97 attributes which were condensed into ten dimensions; they were found to have an impact on service quality and were regarded as the criteria that were important to access customers expectations and perceptions on delivered service (Kumar et al., 2009, p. 214). The SERVQUAL scale which is also known as the gap model by Parasuraman, et al. (1988) has been proven to be one of the best ways to measure the quality of services provided to customers. This service evaluation method has been proven consistent and reliable by some authors (Brown et al., 1993). They held that, when perceived or experienced service is less than the expected service; it implies less than satisfactory service quality; and when perceived service is more than
27

expected service, the obvious inference is that service quality is more than satisfactory (Jain et al., 2004, p. 27). From the way this theory is presented, it seems the idea of SERVQUAL best fits the evaluation of service quality form the customer perspective. This is because when it is stated perceived and expected service, it is very clear that this goes to the person, who is going to or is consuming the service; who definitely is the consumer/customer. The original study by Parasuraman et al., (1988) presented ten dimensions of service quality.Tangibles: the appearance of physical artefacts and staff members connected with the service (accommodation, equipment, staff uniforms, and so on).

Reliability: the ability to deliver the promised service. Responsiveness: the readiness of staff members to help in a pleasant and effective way. Competence: the capability of staff members in executing the service.
Courtesy: the respect, thoughtfulness, and politeness exhibited by staff Members who are in contact with the customer. Credibility: the trustworthiness and honesty of the service provider. Security: the absence of doubt, economic risk, and physical danger. Access: the accessibility of the service provider. Communication: an understandable manner and use of language by the service provider. Understanding the customer: efforts by the service provider to know and understand the customer. In first SERVQUAL model that came had 22 pairs of Likert-type items, where one part measured perceived level of service provided by a particular organization and the other part
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measured expected level of service quality by respondent. (Kuo-YF, 2003, p. 464 - 465). Further investigation led to the finding that, among these 10 dimensions, some were correlated. After refinement, these ten dimensions above were later reduced to five dimensions as below:Tangibility: physical facilities, equipment, and appearance of personnel. Reliability: ability to perform the promised service dependably and accurately. Responsiveness: willingness to help customers and provide prompt service. Assurance: knowledge and courtesy of employees and their ability to inspire trust and Confidence. Empathy: caring individualized attention the firm provides to its customers. The aggregated sum of difference between perceptions and expectations from the five dimensions forms the global perceive quality construct. (Laroche et al., 2004, p. 363) Following this view, customers expectations were met through the outcome dimension (reliability) and exceed it by means of the process dimension (tangibility, assurance, responsiveness, and empathy). To confirm the validity of SERVQUAL model in the evaluation of service quality, Zeithaml et al (2006), stated that service quality is a focused evaluation that reflects the customers perception of reliability, assurance, responsiveness, empathy, and tangibles (Zeithaml et al., 2006, p. 106-107). They added that among these dimensions, reliability has been shown consistently to be the most important dimension in service quality (Zeithaml et al., 2006, p. 106-107). Other researchers saw the need of additional components of service expectations that is functional and technical dimensions. (Grnroos 1983) The idea was that, consumersmake service evaluations based on the technical dimension that is what is delivered

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and on the functional dimension that is how, why, who, and when it is delivered. (Laroche etal., 2004 p. 363: Grnroos 1983). Although the elements listed in SERVQUAL model have been proven to be the mainmethod for evaluating service quality from the consumers perspective (Brown et al.,1993), drawbacks in using SERVQUAL in measuring service quality has been thereason that the SERVPERF scale was proposed by Cronin & Taylor (1992, cited in Jainet al. (2004, p. 25-37) after they called into question the conceptual basis of the SERVQUAL, having found it, led to confusion with service satisfaction (Jain et al.,2004, p. 25-37). These researchers discarded the E for expectation` claiming instead that P for performance alone should be used. They meant that higher perceived performance entails higher quality service. Unfortunately, during this past century, customers have changed their behaviours in ways that do not suit organizational behaviour. Till date, it is unclear as to which of SERVQUAL and SERVPERF is superior in measuring service quality (Jain et al., 2004, p. 25-37). Laroche et al., (2004) made an assessment of the dimensionality of should and will service expectations. They used a survey measuring customers post encounter expectations and vis-vis a well-known airline with a sample of 363 and examined the existence of hypothesized functional and technical dimensions of should and will expectations and determined the casual relationships between two types of expectations and hypothesized dimensions. They tested their dimensions in the context of the turbulent airline industry. This study measured service quality with other service quality dimensions such as technical and functional dimensions proposed by Grnross (1983). Hence it was proven that the SERVQUAL model must not be used in evaluating service quality in all organizations. This could mean that; different industries might require different measurements for service quality.
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2.7 Customer satisfaction and service quality

Since customer satisfaction has been considered to be based on the customers experience on a particular service encounter, (Cronin & Taylor, 1992) it is in line with the fact that service quality is a determinant of customer satisfaction, because service quality comes from outcome of the services from service providers in organizations. Another author stated in his theory that definitions of consumer satisfaction relate to a specific transaction (the difference between predicted service and perceived service) in contrast with attitudes, which are more enduring and less situational-oriented,(Lewis, 1993, p. 4-12) This is in line with the idea of Zeithaml et al (2006, p. 106-107). Regarding the relationship between customer satisfaction and service quality, Oliver (1993) first suggested that service quality would be antecedent to customer satisfaction regardless of whether these constructs were cumulative or transaction-specific. Some researchers have found empirical supports for the view of the point mentioned above (Anderson & Sullivan, 1993; Fornell et al 1996; Spreng & Macky 1996); where customer satisfaction came as a result of service quality. In relating customer satisfaction and service quality, researchers have been more precise about the meaning and measurements of satisfaction and service quality. Satisfaction and service quality have certain things in common, but satisfaction generally is a broader concept, whereas service quality focuses specifically on dimensions of service. (Wilson et al., 2008, p. 78). Although it is stated that other factors such as price andproduct quality can affect customer satisfaction, perceived service quality is a component of customer satisfaction (Zeithaml et al. 2006, p. 106-107).

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Some authors have agreed to the fact that service quality determines customer satisfaction. Parasuraman et al., (1985) in their study, proposed that when perceived service quality is high, then it will lead to increase in customer satisfaction. Some other authors did comprehend with the idea brought up by Parasuraman (1995) and they acknowledged that Customer satisfaction is based upon the level of service quality that is provided by the service providers (Saravana & Rao, 2007, p. 436, Lee et al., 2000, p. 226) since service quality acted as one of the factors that influence satisfaction. More evidence of this relationship has been proven by past researches. As a result of the definition of customer satisfaction presented by Lewis, (1993, p. 4-12), Sivadas & Baker-Prewitt (2000, p. 73-82) used a national random telephone survey of 542 shoppers to examine the relationship between service quality, customer satisfaction, and store loyalty within the retail department store context. One of the results was that service quality influences relative attitude and satisfaction with department stores. They found out that there is a relationship between customer satisfaction and service quality. In line with the findings of Sivadas & Baker-Prewitt (2000, p. 73-82), Su et al., (2002,p. 372) in their study of customer satisfaction and service quality, found out that; these two variables are related, confirming the definitions of both variables which have always been linked. They also dictated that service quality is more abstract because it may be affected by perceptions of value or by the experiences of others that may not be so good, than customer satisfaction which reflects the customers feelings about many encounters and experiences with service firm. (Su et al., 2002, p. 372). In addition to what the other researchers have found out from customer satisfaction and service quality, some other authors Wang & Hing-Po (2002), went into details to bringin customer value in the study of the relationship between customer satisfaction andservice quality. Their study
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used SERVQUAL model in measuring service quality in Chinas mobile phone market, but with modification on the basis of focus groupdiscussions and expert opinions to reflect the specific industry attributes and the special culture of China. Emphasis was then paid to the study of the dynamic relationships among service quality, customer value, customer satisfaction and their influences on future behaviours after the key drivers of customer value and customer satisfaction were identified. All of them were based on the development of structural equation models by using PLS-GRAPH Package. (Wang & Hing-Po, 2002 p. 50-60) This study blended the study of customer satisfaction and service quality with customer value which added more weight to the linkage between customer satisfaction and service quality because value is what customers look in an offer. Past studies on the relationship between customer satisfaction and service quality which included SERVQUAL dimension have been published since from 2003 to 2010, the research on this topic droped from 2004 to 2006 and was stable, between 2008 and2009, there was no study on this field of study that treated the relationship betweencustomer satisfaction and service quality with SERVQUAL dimension; research on this topic increased rapidly in 2010 With regards to the above statistics; Kuo ( 2003) conducted a research on service quality of virtual community websites with the purpose of constructing an instrument to evaluate service quality of virtual community websites and to have a further discussion of the relationship between service quality dimensions and overall service quality, customer satisfaction and loyalty. The researcher used Factor analysis, t-test, and Pearson correlation analysis to analyse the data collected from college students of three major universities in Taiwan. One of the results was that on-line quality and information safety is positively related to the overall service quality, customer satisfaction, and loyalty, but the service quality level of this dimension was the poorest. (Kuo, 2003, 461-473).
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In contrast to the above studies; Bennett & Barkensjo (2005) studied relationship quality, relationship marketing, and client perceptions of the levels of service quality of charitable organizations. Questions were asked to 100 people on their perceptions of service quality of the organizations that had given them assistance, their satisfaction with a charity service etc. they constructed a model and estimated using the method of partial least square. Also, perceived service quality was measured via adaptations of the SERVQUAL instrument but without any assessments of the respondents' prior expectations concerning the services they would receive from an organization. In their results, relationship marketing was found to represent an effective weapon for improving both relationship quality and beneficiaries' satisfaction with service provision. They stated that relationship quality and actual service quality induced beneficiaries to want to recommend a charity to other people and to engage in positive word-of-mouth. (Bennett & Barkensjo, 2005, p. 101). Meaning the beneficiaries who stood as the customers were satisfied since recommendation is signal of satisfaction, confirming the idea that service quality is related to customer satisfaction. They were not directly conducting a research on the relationship between customer satisfaction and service quality, but because when talking about client perceptions, one must think of their satisfaction, and when talking about service quality there is a link between these two as has been proven by many researchers ( Baker-Prewitt, 2000, p. 73-82; Kuo-YF, 2003, 461-473; Gera, 2011, p. 2-20) This means it could be useful to test these three variables (Customer satisfaction, service quality and Service quality dimensions). The study of Bennett & Barkensjo (2005) stated that the hypothesis elements ofSERVQUAL model (Tangible, assurance etc.) were scientifically associated with the service quality construct (Bennett & Barkensjo, 2005, p. 101). It could be interesting totest SERVQUAL model with the

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five dimensions and service quality assuming that expectations is included to see if it will be significantly associated. In support of the use of SERVQUAL in the relationship between customer satisfaction and service quality, Ahmed et al., (2010) conducted a mediation of customer satisfaction relationship between service quality and repurchase intentions for the telecom sector among university students, with SERVQUAL models 5 dimensions (tangibles, responsiveness, empathy, assurance and reliability) by Parasuraman et al. to measure service quality. To crown the fact that customer satisfaction and service quality are important variablesin business research on customers, Gera (2011) investigated the link between service quality, value, satisfaction and behavioural intentions in a public sector bank in India and one of their results states that Service quality was found to significantly impact on customer satisfaction and value perceptions (Gera, 2011, p. 2-20) The literature review shows latest researches up to 2011 on the relationship between customer satisfaction and service quality. The researches in this area have been covered so far as below; It has been researched that there is a relationship between customer satisfaction and service quality It has been researched that service quality could be evaluated with the use of SERVQUAL model. It has been researched that service quality could be evaluated by other dimensions of service quality that is, functional and technical and not necessarily SERVQUAL model. Some researchers even tested service quality and service quality dimensions.

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What is lacking is the relationship between customer satisfaction and service quality dimensions. Among all the recent articles that I could reach, none of the studies had tested the five dimensions of SERVQUAL and customer satisfaction and service quality at the same time to confirm this relationship between customer satisfaction and service quality.

2.8 Conceptual Frame work

The aim of this section is to summarise the idea I got from past literature and to bring out the contributions I have for this study area. Thus this part starts with the idea generated and the contribution follows. The general idea from the past literature is that there is a relationship between customer satisfaction and service quality; also that service quality could be evaluated with the use of five service quality dimensions and the most useable is the SERVQUAL scale. Following the two clarifications about the different views of customer satisfaction of a customer of either being transaction-specific or cumulative (Boulding et al., 1993; Andreassen, 2000). My theoretical frame work treats customer satisfaction as transaction-specific. Thus, customers in this paper are those who consume the services, satisfaction denotes customers desire to maintain a business relationship with the organization and it is also the feelings of the customers towards the services provided to them by the organizations; while customer satisfaction in this study is the pleasures obtained by customers for the services provided to them by the employees of the organizations. It has been proven that perceived service quality is a component of customer satisfaction (Ziethaml et al. 2006, p.106-107). Other researchers had proven also that there is a relationship between customer satisfaction and service quality (Sivadas & Baker-Prewitt, 2000, p. 73-82; Wang et al., 2002, p. 50-60; Kuo-YF, 2003, Liang & Zhang, 2009, p. 113-12, Gera, 2011, p. 236

20; Sureshchandar, et al., 2002 p. 363-379). Moreover, the SERVQUAL model has been proven to be the best model to measure service quality in service sectors especially with the customer perspective. This idea generates an assumption that the five dimensions of SERVQUAL model could have a direct relationship with customer satisfaction. Also, it has been stated that service quality is the overall assessment of a service by thecustomers, (Eshghi et al., 2008, p.121). Also, the five dimension of SERVQUAL modelhas been proven to be the main yardsAtick used by most of the researchers in the evaluation of service quality (Wilson et al., 2008, p. 79; Bennett & Barkensjo, 2005, p.101, Negi, 2009; Wang & Hing-Po, 2002). This idea generates an assumption that each of the five dimensions of SERVQUAL model could have a direct relationship withservice quality.

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CHAPTER THREE Data Analysis and Interrelation

This Chapter deals with major finding of the study. All the necessary data and information that were gathered are analyzed and hence the basic issues given the appropriate treatment. However, before going to the basic part of the study, it would be appropriate to know the respondents characteristics. As indicated previously, the respondents selected from different commercial center tax payers of Akaki Kality sub-city small tax payers branch office.

3.1. Respondents back ground.

The respondents (tax payers) back ground deals with the respondents characteristics such as age, sex and educational level. It is clearly illustrated in the following table.

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Respondents s.N0
1

Item Sex

Response
Male Female Total

No
40 10 50 2 15 24 5 4 0 0 50 5 30 3 5 5 2 50

%
80 20 100 4 30 48 10 8 0 0 100 10 60 6 10 10 4 100

18 25 26 30

Age

31 35 36 40 41 45 46 50 Above 50 Total

Below grade 12 Grade 12 complete

Educational

Certificate Diploma

Level

First degree Above first degree Total

Table 3.1 Respondents (tax payers) back ground

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Gender characteristics of respondents In the table 3.1, on gender presents data of respondents. The table shows that the male respondents formed majority of the target population with the total of 40 representing 80%, while 10 respondents representing 20% were females. Age and educational background of respondents The researcher needed to know the age distribution of respondents to help categorize the tax payer because Akaki Kality sub-city small tax payers branch office have different age categories tax payers. And also the table above summarizes the data obtained on the ages of respondents. Analyzing the data from the questionnaire, table 3.1 revels that 2 respondents are between 18-25 years represent 4%, respondents between 26-30 represent 30% between 36-40 respondents 5 represent 10% also, between 31-35 respondents are represent 48% which are the majority, by chance no one respondents is there above 46 years age. The other information that obtained from the above table which means 3.1 is the educational background. It was also necessary for the study to determine the educational levels of the respondents, that is 10% of respondents are below grade 12, 60% are grade 12 completed and 6% are certificate and 10% are also by diploma, 10% are first degree holder and finally 4% above first degree. This suggests that tax payers of different educational qualifications are present in the Akaki Kality sub-city small tax payers branch office.

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3.2 Attitude of tax payer about Akaki Kality sub-city small tax payers branch office.
From all respondents, 50% of the respondents disagree that the distribution of cash registrar machine is faire. 10% of the respondents doubt to show that the distribution of cash registrar machine is faire. The remaining 14% and 26% agree and strongly agree respectively. So it indicated that most of respondents are not satisfied the distribution of cash registrar machine. Item two of the below table 3.2 revel that, 54% of the respondents agreed on the point that benefited from development when we are pay tax to the government. Similarly, 14% of them were strongly agreed and the rest of them doubted and disagreed the point which account for 20% and 12% respectively. This shows that most tax payers believe benefited from the development. It can also be seen from the table 3.2 in item three, most of 62% of respondents were not agreed The amount of tax levied by Akaki kality sub-city small tax payers branch office is fair.16% and 22% was strongly agreed and agreed respectively on this point and no one is doubted on this point. As their response clearly indicated that The amount of tax levied by Akaki kality sub-city small tax payers branch office is unfair.

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Respondent s.no 1 Items The distribution of Responses cash Disagree Agree Doubt Strongly agree Total 2 When you pay tax, do you Disagree believe benefited from the Agree development. Doubt Strongly agree Total 3 The amount of tax levied by Disagree Akaki kality sub-city small Agree tax payers branch office is Doubt fair. Strongly agree Total No 25 7 5 13 50 6 27 10 7 50 22 11 0 8 50 % 50 14 10 26 100% 12 54 20 14 100% 62 22 0 16 100%

registrar machine is faire.

Table 3.2 Attitude of tax payer of Akaki Kality sub-city. All of (50 respondents) of tax payers are not participating in panel discussion and trainings related with merchandizing and law of merchandize by professionals. the reason for this is because of there is no meeting prepared. And also 87% of the respondents which majority are

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run their business without business knowledge which means they are not took a training individually related with commercial or merchandizing activity. The respondents put their reason why the cash registrar machine distribution is not fair.the followings are because of what the distribution is not fair: The merchant not give full information and hid their commodity. Akaki kality sub-city small tax payers branch Has poor controlling system. Corruption Shortage of cash registrar machine.

3.3 The level of akaki kality sub-city small tax payers branch office customer satisfaction from service.
In this section respondent of akaki kality sub-city tax payers evaluate the satisfaction level from service of branch office, consuming time for service, measuring workers punctuality and whether its activity is convenient for documentation or not. As can be seen from the respondents given, it clearly indicated that the satisfaction level of tax payer service given by Akaki kality sub-city small tax payers branch office is low which account for 60% the rest 24% and 26% of them believed that it had moderate and low satisfaction level respectively. Which means the tax payer are not satisfied of akaki kality sub-city small tax payers branch office service. When we seen convenience documentation of Akaki kality sub-city small tax payers branch office from the perspective of tax payers. From all respondents 88% was supported the convenient documentation performance of this branch office is low.10% and 2% was supported

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moderate and high respectively. It indicated that the document are not handling properly and are not given to the tax payer on the time. As can be seen from fig.1, 66% of the respondent supported the akaki kality sub-city small tax payers branch office took a lot of time to serve one customer.18% and 16% of the respondent reveled as moderate and low respectively. This may result in shortage of human resource and problem of convenient documentation. One of the measurements of quality service is punctuality of the workers. based on the response of the respondents 96% Akaki kality sub-city small tax payers branch office worker was punctual.4% respondent support moderate and no one is not support low on this point.

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120% 100% 80% 60% 60% 40% 25% 24% 20% 0% from service consuming time to satisfaction of the serve one customer tax payer documentation worker punctuality 18% 16% 2% 66% high medium low 10% 96% 88%

4%

Fig 1 the level of akaki kality sub-city small tax payers branch office customer satisfaction from service. As we know Qualified human power is one of functional parts for the organization. shortage of human power and absence of necessary department in the organization directly or indirectly affect the organization function.2% respondent believe that enough human power Akaki kality sub-city small tax payers branch office but most of the respondent not agreed the point which means 98% of do not believe enough human power in the Akaki kality sub-city small tax payers branch office and they put the negative impact that shown in this branch office as follows: Worker spent a lot of time to accomplish one task. Weak information network with other sub-city branch office. The documents are not gives to the tax payer on the time.

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Documentation room and tax leivd department are indicated by respondent that human power are not sufficient.

3.4 INTERVIEW ANALYSIS

I already indicated in the metrology parts. I interviews, workers of Akaki kality sub-city small tax payers branch office by purposive technique. The next part is the overall responses of Akaki kality sub-city small tax payers branch office worker:Cash registrar machine distributed based on the capital, commodity or goods stored in market cell. The capital is above 5000.00birr the merchant used cash registrar machine. But the merchants hid their commodity. The workers of Akaki kality sub-city small tax payers branch office believe that shortage of human power in their own organization. Because of this there is no professional trainer of tax payer and shortage of qualified worker in documentation department. According to the respondent a yearly tax are levid by observing the commodity in the market cell and guessing of the profitability of the merchant. The worker also said that there is no document lost in the documentation room but because of shortage of human power and poor storage of the document may customer delay a few minutes.

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CHAPTER FOUR CONCLUSION AND RECOMMENDATIONS

4.1 Conclusions
This study puts some points are conclusions and this points are listed as follows:1. Most of tax payers do not believe the distribution of cash registrar machine is fair. 2. Un fair distribution of cash registrar machine have two negative impacts. For merchants side of view, he/she does not compute with those are not used cash registrar machine because the merchant customer are not buy tax levied commodity or goods. The government loss a huge amount of money from tax collection. 3. Most tax payers believe that benefited from the development because of tax paid for the government but they are not believed Ethiopian revenues and customs authority have a good tax collection system. They also blame the implementation such as the amount of tax levied and corruption. 4. The amount of tax levied on the tax payer by Akaki kality sub-city small tax payers branch office is not fair related with their profit 5. akaki kality sub-city small tax payers branch office levied a yearly tax by forecasting or guess 6. Many merchants are run their business without knowledge of business.

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4.2 RECOMMENDATION
There are many causes and problems that tax payer are not satisfying the service of Akaki kality sub-city small tax payers branch office. There are some points recommended as a solution. 1. Akaki kality sub-city small tax payers branch office has criteria, which merchant is used cash registered machine or not used. But it does not implement, so this office work a lot for fair distribution of cash registrar machine and build controlling system. 2. akaki kality sub-city small tax payers branch office must improve and correct as much as possible the implementation of well organized implementation of tax levied on the trade. 3. Akaki kality sub-city small tax payers branch office must change a traditional tax assessment. 4. Akaki kality sub-city small tax payers branch office will be prepared a training and meeting by professionals in order to maximize the amount of tax collection and increase the knowledge of the merchant. I think because of this majority tax payer do not paid tax on the time. 5. akaki kality sub-city small tax payers branch office have not efficient enough workers because of this the customer are not satisfied. This branch office for exiting department must employee additional professional and must extend the necessary department. tax collection system especially the

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