1 © MAT Journals 2024. All Rights Reserved Journal of Economic Studies and Financial Research DOI: https://doi.org/10.46610/JESFR.2024.v05i01.001 e-ISSN: 2584-1629, Vol. 5, Issue 1 (January – June, 2024) pp: (1-14) The Dynamics of Tax Assortment in Municipality, Ethiopia Idris Ali Yimer 1* , Temesgen Setegn 2 1,2 Faculty, Department of Accounting and Finance, College of Business and Economics, Wolkite University, Ethiopia * Corresponding Author: yebeyu@gmail.com Received Date: February 05, 2024; Published Date: March 12, 2024 Abstract The government has conducted research to determine the variables influencing how well taxes are collected and administered. The value of tax collection depends on several variables, including the state of the economy, the public's support for the government's priorities, and the willingness of taxpayers. Effective taxation necessitates an effective tax system for collection. The right collecting mechanism is necessary for the provision of necessities like roads, schools, health facilities, and the like. The purpose of the article was to investigate the variables influencing Wolkite Town's category C taxpayers' tax-collecting efficiency. The goal of the study was to investigate the dynamics influencing the tax collection system's efficacy variables including tax compliance, tax awareness, individual income, tax avoidance, and evasion. Multiple regression models and a primary source of data were employed in the investigation. The data was analysed and presented using SPSS tools and descriptive statistics. According to the research paper's findings, tax awareness exhibits a negative and insignificant impact on the regression results, tax compliance is positive and significant, individual income has a significant and positive sign, and tax evasion and avoidance have a positive and insignificant impact on the effectiveness of tax collection. On the other hand, individual income and income tax compliance have a big influence. Keywords- Category „C‟, Ethiopia, Gurage Zone, Municipality, Tax assortment JEL Classification: H 2 0, H 2 INTRODUCTION Tax is the backbone for developing countries like Ethiopia. It is an unavoidable payment or contribution from an economic unit without any direct and proportional benefit from the government for their giving. Tax is the major income for the state to fund public expenditure and other costs [1]. Internal aspects such as the skill and experience of employees, and infrastructure facilities including computerization of the revenue also highly impact the effectiveness of tax collection. In the complex situation ministry of Revenue needs to develop clear and understandable procedures to achieve the tax collection goal as per plan efficiently and effectively [2]. Any nation, to secure development, needs revenue collected in the form of tax. The infrastructures belong to society as some put it. Yimer and Mekuriaw, are not only providing service to society but also are constructed by the money collected from them [3]. Thus, the tax that is collected from the taxpayers is usually utilized for the construction of different infrastructural facilities for the public [4]. Tax is the key base of revenue for the regime to finance its expenditure. Therefore, it is better to have a proper plan and study to have an effective collection system. The government must collect an appropriate amount of tax to provide essential services to the public such as infrastructure, health care, education, etc. However, some factors affect the effectiveness of tax collection more in developing countries like our country Ethiopia such as /awareness, tax compliance, the income of individuals and tax evasion, etc. [5]. Category “C” taxpayers: that are not classified under Categories "A" and "B" taxpayers and businesses with yearly turnover estimated up to Br 100, 000 are classified under this category of taxpayers. A standard estimation technique should be used to determine category C taxpayer‟s tax liability. The taxpayer should pay the tax determined following standard assessment [6,21]. To avoid negative attitudes