Determinants of Own Source Revenue Collection in Sub Cities in Addis Ababa

Abstract

In the absence of intergovernmental transfer and limited financial resources, each sub cities of A.A are expected to mobilize adequate own source revenue collection to supply the necessary investments in public infrastructure, services and improve living standards of the citizens. Research conducted to answer the three basic research questions: What are the sources and performance of key own source revenue of sub cities in Addis Ababa? What are factors affecting own source revenue mobilization of sub cities in Addis Ababa? And what are the prospects for improved own source revenue mobilization strategies? In this study, the researcher has selected independent variables (land area, population, tax base/number of tax payers, inflation, GDP, import and export) that can affect the own source revenue. Census study was used study to select all sub cities in A.A with twelve years available data which were collected from secondary data. Data analysis was made by using descriptive statistics analysis method, the result showed that bole sub city collected larger amount of revenue and it has the second largest land area. The regression result showed that only four independent variables which are LA, numbers of tax payers, inflation and GDP are found to be predictors of the dependent variable. Government investment income is one of the top ten key sources of revenue for the city of A.A. Hence, the government of A.A should implement land property tax in the tax base can increases the revenue collection.