7. Tax Compliance Attitude of Rural Farmers: An Analysis Based on Survey Data in Ethiopia

Applying logit regression models, we present the factors that determine the tax compliance attitude of individual smallholder farmers in Ethiopia. The evidence presented in this article is based on the 5th Afrobarometer Survey (2014). We find some similarities and some differences with earlier studies in factors that are correlated with the tax compliance attitude of smallholder farmers in Ethiopia. We argue that tax compliance is a function of individual smallholder farmers and related variables and confirm that people who are happier with open administration arrangements have a tax compliant attitude. Those farmers who perceive that their ethnic group thinks that they have been treated unfairly are less likely to have a tax compliant attitude. Smallholder farmers’ tax knowledge is also significantly correlated with a tax compliant attitude in Ethiopia. We identify a taxpayer’s satisfaction with local government officials as another determinant of tax compliance. These findings are robust to different econometric specifications.