The purpose of this study was to identifying and assessing the problems rose in association with the implementations of VAT & its related problem in Eastern Addis Ababa medium taxpayer's office. To conduct this study, the descriptive survey method was employed.. Specifically, a stratified random sampling technique was employed for tax payers as well as employees treated through questionnaire whereas random sampling technique was applied for managers of Eastern medium taxpayer's office.

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... count, percentage, mean, standard deviation, t-value and P-value were utilized to analyze quantitative data gained through the questionnaires. The finding shows that taxpayers do believe that, during tax refunding requests, using illegal invoices had lower chance of being detected and taxpayers and employees do also required the tax authority to amend its standard time set for VAT refund and they also strongly agreed that the tax authority provided them continuous tax education and sufficient free call information centers were arranged by the authority. The result of the study indicated that VAT implementation in medium taxpayer office has faced different challenges and apart from the existing challenges, taxpayers were not attempted to avoid VAT, and that they would exert more effort to pay more taxes as public finance property. The main problems that encountered are: misunderstanding of the public in general and business community in particular regarding the VAT laws, Tax administration, filling challenge and VAT refund or issuance of illegal invoices exercised by business enterprises. All these constraints hinder the smooth implementations of VAT and achieve the desired objectives as possible. on the basis of these findings, the study recommends that the authority should train the taxpayers about the rules and regulations of VAT continuously, recruiting new employees give training different way, delegate the tax authority to regional and city administration and it should also increase its follow-up and investigatio [...]