FACTORS AFFECTING ELECTRONICS TAX FILING EFFECTIVENESS,

CASE OF ADDIS ABABA LAGRE TAX PAYERS BRANCH OFFICE

HARAMBEE UNIVERSITY

POST GRADUATE PROGRAM

BY
WORKU TEMESGEN

A THESIS PROPOSAL SUBMITTED TO SCHOOL OF GRADUATE STUDIES

IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR MASTER DEGREE IN

BUSINESS ADMINISTRATION

ADVISOR: MAMA SULTI (PHD)

SEPTEMBER, 2024

ADAMA ETHIOPIA
 DECLARATION

I, the under signed, declare that this thesis titled “Factors Affecting Electronics Tax Filing
Effectiveness, Case of Addis Ababa Large Tax Payer is my original work and has not been
presented for a degree in any other University, and that all the sources of material used for the
thesis have been duly acknowledged.

Name …………………………..
Signature ___________________________
Date ________________________________

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 CERTIFICATION

This is to certify that the thesis prepared by Worku Temesgen entitled with “Factors Affecting
Electronics Tax Filing Effectiveness, Case of Addis Ababa Large Tax Payer which is submitted
in partial fulfillments of the requirements for the degree of Masters of Business Administration
(MBA) complies with the regulation of the university and meet the accepted standard with
respect to originality and quality. Therefore, this thesis has been submitted with my confirmation
as advisor to the candidate.

Name Mama S. (Ph.D.)

Signature

Date 08/10/2024

ii
 ACKNOWLEDGEMENT

I would like to express my gratitude to Almighty God for giving me endurance and strength in
accomplish my thesis and academic successfully.

I would like to express my heartfelt appreciation to my advisor Mama Sulti (PHD) for his advice
in selecting the title and assisting me without limiting his knowledge while I was preparing my
research paper.

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 TABLE OF CONTENTS
DECLARATION…………………………………………………………………….………….…i
CERTIFICATION…………………………………………………..………………………….…i

iACKNOWLEDGEMENT………………………………………………………………………………………..
…………………………….iii

LIST OF ACRONYMS AND ABBREVIATIONS....................................................................................vi

LIST OF TABLES………………………………………………………………………………………………………………………………………vii

LIST OF FIGURES..................................................................................................................................viii
CHAPTER ONE..........................................................................................................................................1
INTRODUCTION.......................................................................................................................................1
1.1 Back Ground of the Study........................................................................................................1
1.2.Statement of the Problem..........................................................................................................2
1.3.Objectives of the Study.............................................................................................................4
1.3.1. General Objective.................................................................................................................4
1.3.2. Specific objective……………………………………………………………………………………………………………..4

1.4.Research Questions...................................................................................................................4
1.5.Scope of the Study....................................................................................................................4
1.6.Significance of the Study..........................................................................................................5
1.7.Definitions of Terms.................................................................................................................6
1.8.Organizing the Paper................................................................................................................7
CHAPTER TWO.........................................................................................................................................8
REVIEW OF RELATED LITERATURE...................................................................................................8
2.1. Theoretical Review.....................................................................................................................8
2.1.1 The Meaning and Concept of Tax...............................................................................................8
2.1.2. Objectives of Taxation.............................................................................................................10
2.1.3. E-Taxation...............................................................................................................................10
2.1.4. Benefits of E-Tax Payment......................................................................................................11
2.1.5. Challenges of E-Tax Payment..................................................................................................12

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 2.1.6. Electronic Tax Filing System...................................................................................................13
2.1.7.E-tax filing system in ERCA....................................................................................................14
2.1.8. Benefits of using Electronic Tax Filing system.......................................................................15
2.1.9. Challenges of using Electronic Tax Filing system...................................................................17
2.2. Empirical Evidence....................................................................................................................19
2.3. Research Gap..............................................................................................................................21
2.4. Conceptual Framework of the Study......................................................................................21
CHAPTER THREE...................................................................................................................................23
RESEARCH DESIGN AND METHODOLOGY......................................................................................23
3.1. Research Design.........................................................................................................................23
3.2. Research Approaches..................................................................................................................23
3.3. Source of data.............................................................................................................................23
3.4. sampling design...................................................................................................................24
3.4.1. Target population................................................................................................................24
3.4.2. Sample size.........................................................................................................................24
3.4.3. Sampling Techniques..........................................................................................................25
3.5. Data Collection Instruments.......................................................................................................26
3.6. Methods of data analysis.............................................................................................................26
3.7. Reliability and Validity of the Instruments ................................................................................26
3.7.1 Validity..............................................................................................................................26
3.7.2 Reliability..........................................................................................................................27
3.8. Ethical Considerations................................................................................................................27
REFERENCES.............................................................................................................................28

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 LIST OF ACRONYMS AND ABBREVIATIONS
EE Effort Expectancy
ERCA Ethiopian Revenue and Customs Authority
ICT Information and Communication Technologies
ICF Investment Climate Facilitation for Africa
IT Information Technology
ITD International Tax Dialogue
MOR Ministry of Revenue
PE Performance Expectancy
PR Perceived Risk
RTI Real Time Information
SIGTAS Integrated Government Tax Administration System
SI Social Influence
U.S.A United States of America
UTAUT Unified Theory of Acceptance and Use of Technology

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 LIST OF TABLES

Table 1: Employees target population.......................................................................................................24

Table 2: Employees targe population and sample size...............................................................................25

vii
 LIST OF FIGURES

Figure 1: Conceptual framework...................................................................................................22

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 CHAPTER ONE

INTRODUCTION

1.1 Back Ground of the Study

Taxation is one of the main economic tools used by governments to regulate the
macroeconomy and mobilize revenue for the budget towards the goal of economic
growth, poverty alleviation, and social justice (Arvin et al., 2021; Gurdal et al.,
2021; Maganya, 2020).

Since the early twentieth century, governments across countries have undertaken
extensive tax reforms to pursue growth goals, especially in low—middle-income
countries, where the tax revenue and GDP is only 14–15%, compared to 30% in
developed countries (World Bank, 2021). Thus, policymakers in developing
countries are concerned about funding public spending activities aimed at economic
development. However, increasing tax revenue leads to many objections since it
directly affects several aspects of the economy.

E-filing significantly reduces the time required for tax submissions. Taxpayers no longer need to
visit tax offices physically, which can be time-consuming. For instance, studies indicate that
firms in Tajikistan reduced their monthly compliance time by approximately 40% after adopting
e-filing. E-filing promotes transparency in tax administration by limiting the discretion of tax
officials in processing returns. This can reduce opportunities for corruption and collusion
between taxpayers and officials (Okunogbe & Pouliquen, 2021).

A significant barrier to the successful implementation of e-filing systems is the lack of digital
literacy among taxpayers. Many individuals may not be comfortable using online platforms,
which can hinder their ability to comply with e-filing requirements (Tadesse & Melaku, 2024).

In 2023, the Ethiopian Ministry of Revenue continued to expand its electronic tax payment
system, which allows taxpayers to submit their tax returns electronically. This system not only
facilitates easier compliance but is also believed to enhance public service delivery and the

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dissemination of information related to public administration (Nisar, 2023). The e-tax system has
been instrumental in reducing paperwork and improving efficiency within the tax authority by
automating various processes such as data entry, payment processing, and issuing assessments
(Yimam et al., 2024).

As for Ethiopia, in February 2013, the Ethiopian Revenue and Customs Authority (ERCA)
implemented an e-tax system that has significantly benefited the business community and
Ethiopia's wider economy. This system allows taxpayers to submit their tax returns electronically
to the tax authorities, which is believed to enhance the delivery of public services and improve
the dissemination of public administration information (Smith & Abebe, 2023).

A tax authority engages in many activities, such as processing returns and related information
from taxpayers, entering tax return data into a database, matching returns against filing
requirements, processing tax payments, and issuing assessments and refunds. One way of
assessing the tax authority’s efficiencies is by expanding its use of information and
communication technology (ICT). Such technology can facilitate a broad range of services,
including registering taxpayers, filing returns, processing payments, issuing assessments, and
checking against third-party information (Johnson, 2024).

E-payment systems provide numerous benefits to taxpayers, tax consultants, and tax
administrations, such as convenience, as e-payment can be accessible at any time, 24 hours a
day. The system reduces the time and effort invested in tax payments, offers safe and secure
payment options, minimizes transaction costs, increases customer satisfaction, enables speedy
revenue collections, reduces cash handling costs, and provides timely information on payments
(Williams & Tesfaye, 2023). With the above benefits of e-tax filing, this study will assess the
electronic tax filing practices in the case of Addis Ababa's large taxpayers' branch office.

1.2 Statement of the Problem

According to a recent report from the African Development Bank (2023), Ethiopia's government
is actively working to bolster its tax collection mechanisms and expand its tax base. This
initiative is part of a broader strategy to ensure sustainable financing for development projects
and public services, particularly in light of the country's reliance on external funding sources.
The report highlights that enhancing tax revenue is crucial for reducing dependency on foreign

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aid and fostering economic self-sufficiency (Ayenew, 2023). The government's focus on
improving tax administration has led to the implementation of various reforms aimed at
increasing efficiency and transparency within the tax system. These reforms include adopting
electronic tax payment systems, which facilitate easier compliance for taxpayers and streamline
revenue collection processes (World Bank, 2024). As a result, these efforts are expected to
significantly contribute to Ethiopia's fiscal stability and support its long-term development goals.

Electronic taxation (e-taxation) refers to the integration of computer systems and networks in the
processes of tax assessment, collection, and administration. This encompasses e-filing and e-
payments, enabling taxpayers to submit tax returns and make payments electronically. As of
2023, e-taxation has evolved as an essential component of e-governance and e-commerce,
facilitating the exchange of data between taxpayers and tax authorities through information
communication technology (ICT). The primary objective of e-taxation is to replace outdated
manual processes with efficient, collaborative, and secure online systems. This shift aims to
enhance service delivery by minimizing bureaucratic hurdles and improving the overall taxpayer
experience (Yimam et al., 2024).

The Ethiopian government has been actively implementing these electronic systems to
streamline tax compliance and administration, thereby increasing revenue collection and
reducing instances of tax evasion. Recent studies indicate that the adoption of e-taxation in
Ethiopia has led to significant improvements in tax compliance rates among large and medium
taxpayers. The implementation of electronic systems has not only simplified the filing process
but also reduced the time and costs associated with tax compliance (Ayenew, 2023; World Bank,
2024). The ongoing expansion of these technologies is expected to further enhance the efficiency
and effectiveness of Ethiopia's tax administration.

The tax systems in developing countries are increasingly influenced by technological

advancements, presenting both challenges and opportunities. A recent study highlights the
introduction of an electronic tax filing system by the Ethiopian Revenue and Customs Authority
(ERCA) as a significant development in this context. Despite the potential benefits of electronic
tax systems, including increased efficiency and reduced administrative burdens, there is a notable
lack of research focusing on the factors that affect the effectiveness of electronic tax filing. This
study aims to assess the factors influencing electronic tax filing effectiveness, specifically at the

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Addis Ababa Large Taxpayers Branch Office. Previous research has indicated that while
electronic filing can streamline processes and enhance compliance, its success is contingent upon
various elements such as taxpayer attitudes, perceived ease of use, and the overall infrastructure
supporting these systems (Okunogbe & Pouliquen, 2022). Understanding these factors is crucial
for optimizing electronic tax systems and ensuring they meet the needs of taxpayers in
developing nations.

1.3 Objectives of the Study

1.3.1. General Objective

The general objective of the study is to assess electronic tax filing practice, case of Addis Ababa

large tax payer’s branch office.

1.3.2. Specific Objectives

1.To assess the challenges of E-tax filing in the branch
2.To assess the practices of E-tax filing in the branch
3.To examine the most dominant factors affecting E- tax filing effectiveness in
the branch office

1.4 Research Questions

1.What is the challenge of E-tax filing in the branch?
2.What are the practices of E-tax filing in the branch?
3.Which factor most dominant in affecting E- tax filing effectiveness in the
branch office?

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1.5 Scope of the Study

This thesis will be delimited assessment of factors affecting E- tax filing effectiveness, case of
Addis Ababa large tax payer’s branch office. This study will be confined to Addis Ababa city,
though physically confined to large tax payer’s branch office and tax payers found in Addis
Ababa. The main reason for choosing this problem is that improving tax administration practice
is important for the development of the city in particular and country development in general.
Thus, the study will be delimited to explore the status of electronic tax filing practice in Addis
Ababa.

Considering the growing interest of governments in reforming tax collection and administration
methods this research plays a vital role in factors affecting E- tax filing effectiveness. The study
is significant since it contributes to the limited literature that exists.

This research will be conducted to the assessment of factors affecting E- tax filing effectiveness,
case of Addis Ababa large tax payer’s branch office. Since it is time and cost consuming this
study will be geographically delimited. The study is conducted only on Addis Ababa large tax
payer’s branch office.

Out of the various aspects of E-tax filing effectiveness, this study looks at three major
dimensions such as the challenges of E-tax filing in the branch, the practices of E-tax filing in the
branch, the most dominant factors affecting E- tax filing effectiveness in the branch office.
The study will be also having boundaries and constraints imposed in terms of its design,
methods, and data collection. Out of the various research designs a descriptive research design
will be selected for this study. Factors affecting E- tax filing effectiveness a survey will be
conducted through standard questionnaires and interview.

1.6 Significance of the Study

This research paper will be expected to provide empirical evidence on the strengthen E-tax filing
practice of Addis Ababa large tax payer branch office. The study will be helpful for different
stakeholders, it contributes as an indicator to MOF (Ministry of finance) that make policies about
e-tax payment system and to MOR that provide directives for policies that are provide by MOF
and announced the system and collect tax through e-payment with useful information to develop
its service delivery system with quality training to MOR employees and to taxpayers and also to

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facilitate better directives and issue to the commercial bank of Ethiopia and to work together
with other banks too for implementing e-tax payment system in a better and suitable way to
taxpayers and tax authority. Moreover, it may also be useful to the bank management to make
strategic decisions to provide satisfactory and quality service to taxpayers.
Taxpayers are also expected to get benefit from this research. After reading this thesis they will
have a good understanding about the new e-tax payment system. Finally, the research will also
contribute useful thoughts to future researchers because e-tax payment is a new issue for the
country, there is a lack of research in the area of e-tax payment system thus future researchers are
going to use this research paper.

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1.7 Definitions of Terms

Tax: - A tax is a mandatory financial charge imposed by a government or other

authority on various forms of economic activity, including income, property, and
sales. Taxes are essential for funding public services, redistributing wealth, and
influencing both economic and social behaviors. Organization for Economic Co-
operation and Development. (2024).

Tax practices: - encompass the diverse methods, strategies, and procedures employed by
individuals, businesses, and tax authorities to manage and meet their tax obligations. This
includes activities such as tax planning, preparation, filing, and compliance. Recent
advancements highlight the growing importance of digital tools in tax administration, which
facilitate communication between taxpayers and tax authorities, streamline processes, and
enhance compliance through data analytics. Organization for Economic Co-operation and
Development. (2024).

Challenges: -Challenges in taxation refer to various obstacles and issues that arise during the
implementation and enforcement of tax laws. These challenges may include taxpayer compliance
difficulties, tax evasion, administrative complexities, technological limitations, and the need for
ongoing improvements and adaptations.
International Monetary Fund, 2023; OECD, 2022)

Taxpayer: - A taxpayer is any individual or entity required to pay taxes to a government or

taxing authority. This category includes individuals, businesses, corporations, and other legal
entities subject to tax obligations. (Blyce. 2024).
E-Tax Filing: - E-tax filing refers to the electronic submission of tax returns and related
documents to tax authorities using online platforms. This method allows taxpayers to complete
their tax filings digitally, offering a more efficient and convenient alternative to traditional paper-
based filing. E-tax filing often includes features such as automatic calculations, immediate
acknowledgment of submission, and access to prior returns, which can simplify the tax
preparation process (Internal Revenue Service2023).

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1.8 Organizing the Paper
The organization of this study will be divided in to five chapters. Based on that chapter one
stated as introduction, Chapter two explains about review of related literature, chapter three deals
with research designs and methodology, chapter four will contain data analysis and interpretation
and chapter five will consisting of summary of findings conclusion and recommendation.

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 CHAPTER TWO
REVIEW OF RELATED LITERATURE

2.1. Theoretical Review

2.1.1 The Meaning and Concept of Tax

Taxation is defined as a compulsory levy imposed by a government or a government-appointed
body (tax authority) on income, expenditure, or capital assets, for which the taxpayer receives
nothing specific in return. This financial obligation is often perceived as a cost by taxpayers,
whether individuals or corporate entities. However, a conflict arises in taxation: taxpayers
typically seek to minimize costs and maximize profits, while governments aim to maximize
revenue through enhanced tax compliance. To strike a balance between taxpayers and tax
collectors, it is essential for the latter to develop strategies that simplify tax procedures and
requirements. One effective strategy is the implementation of enhanced taxpayer education
programs. Recent studies have shown that taxpayer education significantly improves knowledge
and compliance behavior among taxpayers. For instance, a study evaluating a taxpayer education
program in Rwanda found that training new taxpayers led to substantial improvements in their
understanding of the tax system and increased their likelihood of filing tax declarations
(Mascagni & Santoro, 2024)

Tax is defined as a compulsory levy imposed by a government or a government appointed body

(tax authority) on income, expenditure, or capital assets, for which the taxpayer receives nothing
specific in return. On the other hand, tax may be viewed as a cost to the tax payer whether as an
individual or a corporate body. However, there is a conflict in taxation whereby tax payers’
desire to minimize costs and maximize profit, while government’s desire is to maximize revenue
through enhanced tax compliance. To strike a balance between the taxpayer and the tax collector,
the latter need to come up with strategies and methods of simplifying tax procedures and
requirements. One such strategy is the use of enhanced tax payer education (Lymer and Oats,
2009)

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A tax is “a compulsory charge imposed by the Government without any expectation of direct
return in benefit”. In other words, a tax is a compulsory payment or contribution by the people to
the
A tax is defined as a compulsory charge imposed by the government without any expectation of
direct benefit in return. This means that taxes are mandatory payments or contributions made by
individuals or businesses to the government, for which there is no direct reciprocal service
(OECD, 2021)

Taxation creates a personal obligation for individuals to pay if they meet the criteria for liability.
It is essential that the general public is taxed according to their ability to pay; individuals in
similar financial situations should be taxed equitably, without discrimination. Thus, tax can be
characterized as an "involuntary fee" or, more accurately, an "unrequited payment" made to the
government (Bahl & Wallace, 2022). This principle underscores the importance of fairness and
equity in tax systems, ensuring that all taxpayers contribute their fair share based on their
financial capacity.

Tax has been defined by various authors and professionals in various ways. Taxes are the major
source of the public revenues. Government needs financial resources to act as a government and
play a role that is expected from it by the public. So, what the government gives, it must first
take away. Conceptually, tax can be defined or seen as a compulsory transfer of resources from
the private to the public sector (James, S., and Nobes, C. 2000). According to these authors, tax
is a compulsory levy which a government imposes on its citizens to enable it to obtain the
required revenue to finance its activities. And the other scholars Lymer and Oats (2009) tax is
defined as ‘a compulsory levy, imposed by government or other tax raising body, on income,
expenditure, or capital assets, for which the taxpayer receives nothing specific in return’.
Throughout history, people have debated on the amount and kinds of taxes that a government
should impose, as well as on how it should distribute the burden of those taxes across society.
Unpopular taxes have caused public protests, riots, and even revolutions. For instance, in
Ethiopia there was the Gojjam peasant rebellion, in 1968 (Gebru Tareke, 1991).
The immediate cause of the rebellion was the introduction of a new agricultural income tax,
which peasants opposed. In political campaigns candidates’ views on taxation may partly
determine their popularity with voters. Although countries differ considerably in the amount of

10
taxes they collect, yet the most important source of revenue for modern government remains to
be tax. The remainder of government revenue comes from charging fees for services, borrowing
and from other related sources.
Governments may raise or lower taxes to achieve social and economic objectives, or to achieve
political popularity with certain groups. Some economists consider taxation an important tool for
maintaining the stability of a country’s economy. This is because taxation can redistribute a
society wealth by imposing a heavier tax burden on one group in order to fund services for
another (Gebrie, 2006).

2.1.2. Objectives of Taxation

The main objectives of taxation are rising of revenue with which governments can drive human
development by providing systems of health, education and social security and the provision of a
successful economy through regulation, administration and investment infrastructure.
Additionally, reduction of poverty and inequality to ensure that benefits for development are felt
by all, and appropriate utilization of taxes and subsidies to ensure that all social costs and
benefits of production or consumption of a particular good are reflected in the market price, for
example, the taxation of tobacco to limit damage to the health of citizens. Moreover, strengthen
and protection of channels of political representation (Cobham, 2007).

2.1.3. E-Taxation
Electronic government (e-Government) is the approach of Information and Communication
Technologies (ICTs) to government functions and procedures with the aim of increasing
efficiency, transparency and citizen participation. E-Government uses technological
communication devices to support the development of good governance. The appropriate
approach of e-Government allows for higher levels of effectiveness and efficiency in
governmental duties and responsibilities, e-government allows improvement of processes and
procedures in the country, the system helps to increase the quality of public services, also
improves the decision-making processes and allows for better communication among different
governmental offices. The e-Government objective is to create a new strong connection between
governments and citizens, a system that will become simpler and more participative for the
public (Azmi& Bee, 2010).

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E-government is a system that helps to modernize government activities and tax administration.
Tax administration is an important application of e-government in both developing and
developed countries. E-taxation is a process of tax related duties electronically like e-tax filing
and e-tax payment and the main purpose is to increase tax revenue collection and create
satisfactory service to taxpayers. The E-tax payment system was first in the U.S.A in 1986. In
Australia electronic tax payment was introduced in 1987. In 1993, Canada started the usage of
electronic tax payment. Other developed countries of the world such as Malaysia and
Netherlands introduced electronic payment of tax to their taxpayers in 2009. In Africa, first
Uganda introduced an electronic tax payment system in 2009, and then Egypt started in 2013.
(Olaoye&Atilola, 2018). In Ethiopia e-tax payment system was introduced in 2019 by the
Ministry of Revenue (MOR).

According to Sifile et al. (2018) Electronic tax payment was introduced to increase revenue
Generation and to be easily accessible to taxpayers. And Well-designed electronic tax systems
can lower corruption by reducing face to face interactions.

2.1.4. Benefits of E-Tax Payment

The aim of any tax authority is to create a tax administration system that allows to collect
required taxes at minimum cost. Al Baajetal., (2018) mentions the advantages of taxing within
the electronic taxation systems that are reduction of expenses for the use of paper, safeguarding
cash from loss, theft or embezzlement, saving time and effort in carrying out business and
financial operations. E-tax filing systems improve the quality and quantity of data available to
tax officers that will support the tax office to complete transactions faster and more accurately,
electronically filing has much lower error rates than paper filing. The benefits of e-filing and e-
payment systems expand to other electronic operations in the tax authority like e-filing and e-
payment allow for better, safer data storage which can be used to implement a risk management
system for auditing and enforcement. Computerization helps establish a good system for tracking
case files, which is essential for effective auditing and increases the speed and quality of data
provided to auditors.

Some of the objectives of e-taxations are make cheaper and easier to pay taxes and claim
benefits, tackle tax avoidance and evasion, availability of Real Time Information (RTI)
displaying live statistics of the system, create an easy online registration process for new

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businesses, by moving notification of liability for taxes to online channels, enforce compliance
with tax rules and further investigations on tax avoidance and evasion (Onuiri et al., 2015).

Olaoye&Atilola, (2018) point out that electronic taxation has a great impact on reducing the
practices of tax evasion, electronic taxation achieves smoothing and facilitating the taxpayers’
process with tax departments and also reducing the time needed by the process of taxation
among the taxpayers and for the viewpoint of tax assessor on the field work at the process of
examination and taxation the system help to reduce routine work that to combine the receipt of
supporting documents and also deal with to reduce the methods of tax evasion of taxpayers and
companies, reducing conflict between taxpayers and tax authorities and achieving contact status
with taxpayers anytime.

2.1.5. Challenges of E-Tax Payment

The implementation process for e-filing and e-payment systems have some challenges like
Government support, the government which is meant to be a motivator for the taxpayers’ and
make the environment conducive has to support the e-tax system fully in terms of policies, rules
and regulations. The other challenge is resistance to change the decision whether to use or not to
use electronic tax payment can be influenced by many things such as the type of income earned
by a taxpayers’, size of the business, location, business sector and other attributes of business
(Coolidge and Yılmaz, 2014)

Taxpayers may be loaded by the time and effort spent learning the new system and they may not
be cooperative to the implementation of the system or accommodate any services failure.
Although time is a non-monetary effort and varies among individuals, researchers have
recognized that time is a cost that users must pay for any use of services. The other issue is users’
confidence in the Internet tax-filing system’s ability to protect the user’s personal information
against computer hackers or cyber-crime as it is widely known. A credible website needs to
safeguard personal information from unauthorized access or disclosure, accidental loss and
alteration or destruction (Chang et al., 2005).

Another challenge mentioned by Azmi&Kamarulzaman, (2009) is the technical aspects of e-tax

system, like computer and information systems facilitate for the e-tax payment system need to be

13
stable and reliable enough to handle an amount of information processing, especially during the
peak period of e-tax filing and particularly as the deadline approaches.

According to the World Bank Doing Business (2014), Sub-Saharan economies face extremely
difficult challenges with implementing electronic systems for filing and paying taxes. These
economies are also characterized as part of the world where citizens face limited broadband
access, power shortages, slow network speeds and system failures.

Some additional challenges in which tax authorities experience was explained by Layton (2007)
he mentions information security design, implementation, measurement, and compliance, as lack
of leaders and management support, resistance to change by staff members who are in their
comfort zone in using the manual system and retaining good IT staff members.

Having and retaining good IT staff members was also given emphasis by Korpela et al. (2000)
on their study about the commercial scenarios for the web opportunities and challenges. The
study implies the methodologies for developing information systems, generally, are qualified
mostly in academic and professional institutions in developed countries and focus on
organizations with relatively abundant resources and other favorable conditions. And they noted
that information system development implementations need modification to work in local
African conditions. The information system development practices and methodologies being
used in developed countries have been designed with a much richer infrastructures Information
system development practices are not universal. To support the e-tax filing and payment system
should include persons responsible for IT, business processes, legislative amendments and public
education. The administration also requires modern computer equipment and a good IT platform
(Edwards,

2.1.6. Electronic Tax Filing System

Electronic tax system is a system that has been developed to replace manual system. It is a web
enabled and secure application system that provides a fully-integrated and automated solution for
administration of domestic taxes. It enables taxpayers to register tax, returns filing, payment
registration to allow for tax payments and status inquiries with real-time monitoring of accounts
(Waweru 2013).

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According to Chang and Hung, (2005) E- tax filing is a system for submitting tax documents to
the tax department through the internet or direct connection, usually without the need to submit
any paper documents. Various tax return preparation software’s with e-tax filing capabilities are
available as standalone programs or through websites or tax professionals or from major
software vendors for commercial use. “e - File is the term for electronic filing, or sending your
tax from tax software via the Internet to the tax authority”.

Chanchal, et al (2013) on their study about the satisfaction level and awareness of tax-payers
towards e-filing of income tax return in Moradabad city defined E-filing as the process of filing
tax electronically. Taxpayers no longer stand in long queues and no waiting for filing.
Customized forms have been devised by the Tax Authority which is available on the site. These
forms have been devised with such details that tax payers need not file any supporting document
along with.

According to International Tax Dialogue (ITD) (2010), revenue patterns in most countries show
that a small number of large enterprises account for the majority of tax revenue (60-70% of total
tax revenue). Usually, this majority of tax revenue is classified/ termed under Large Taxpayers.
Due to complexity of large taxpayers and considering their critical role in revenue collection; it
is the responsibility of tax administration to be ahead of large tax payers in technology in order
to curb cheating (Chatama, 2013).

McCarten (2014) emphasized that for large tax payers in order to accomplish its intended
goal/purpose, countries should work towards, among other strategic interventions, reducing the
potential for corruption by automating and restructuring control systems; and simplifying and
reducing paper handling through appropriate use of electronic filing.

2.1.7.E-tax filing system in ERCA

Historically, in Ethiopia the tax returns were filed manually and hand-delivered to the nearest
office. According to Fortune (2013) ERCA’s highly manual tax system has spent significant
amount of its payroll budget on handling paper returns and transcribing data to machine readable
form.

E-tax filing system, which ERCA has been implementing for both large and medium tax payers,
was installed in 2009 by CRC Sogema, a consulting firm based in Canada, with a 90,000 dollars

15
financial support from the Investment Climate Facilitation for Africa (ICF). There are two ways
in which e-tax filing can be accessed; by directly using the authority’s website and authenticating
through two security layers and declaring tax (Fortune, 2015).

The World Bank Doing Business (2014) said that, on the online service delivery status ERCA is
in its premature stage. Still, the need for manual reporting and appearing to a tax office is
unavoidable.

According to AtoBirhanu, Head of Customers Education and Support Team Coordinator,

interview with ERCA’s official monthly newsletter (GebiLelemat #47), e-Tax has the capacity to
provide internet/online services via ERCA’s website or a dedicated website: www.etax.gov.et. If
used at full capability, e-Tax is expected to provide services such as online tax registration (e-
Registration), online monthly and annual tax declaration (e-tax filing), online possibility to effect
payment through an option called Bank Interface, online tax clearance and tax refund request
service (Online e-Service) and online correspondence that help tax payers to request questions
and clarification from ERCA.

In the Practice, Challenges, and Prospects of e-Government; the case of ERCA study (Samuel,
2015) E-Tax is described as a large public application designed to work with the Standard
Integrated Government Tax Administration System (SIGTAS). It is a product that allows
taxpayers to file electronically and to see and print their declarations on line. For security
reasons, the e-Tax database is separate from SIGTAS database. An e-Tax user does not have a
direct access to SIGTAS database but declaration changes are done in SIGTAS and are
automatically reflected in e-Tax. A communication mechanism between the two applications
allows data to flow from one database to the other.

The main web page of ERCA has almost all common information for taxpayers. Taxpayers can
find all necessary legislation, tax forms and information about main tax procedures. The web
page includes a register of VAT taxpayers, public tenders by tax administration, duties and rights
of taxpayers, phone numbers, acts on the amounts necessary to calculate tax obligations, short
presentations on some taxes and an introduction to the tax administration (its duties,
organization, working hours and annual report). It also offers links to other useful web pages
(Gebre, 2006).

16
GebiLelemat #47 asserted the confidentiality of the system. ERCA employees are prohibited
from divulging any taxpayer’s information to third parties. Therefore, with electronic filing the
taxpayer is empowered to take control of the security of his or her information or data, by
securing their login details (login name & password). The confidentiality of taxpayer data is
thereby guaranteed within the system of tax administration and ERCA also enforces strict
disclosure rules for all taxpayer data for data flowing outside the Tax Authority.

2.1.8. Benefits of using Electronic Tax Filing system

Several benefits of electronic filing system have been discussed in literatures. Anna &Yusniza
(2009) conducted a study on Adoption of tax e-tax filing in Malaysia and stated that e-tax filing
allows customers to conduct transactions within a few mouse clicks. This convenience can serve
as a key driver of e-tax filing adoption. E-tax filing provides many aspects of ‘convenience’ to
taxpayers (that is time to file, place to conduct the filing, ease-confuse, information searching
and online transactions) at a degree that is not available through traditional channels.
Accessibility is allowed 24x7x365. E-tax filing also offers flexibility of time and reduces
calculation error on the tax return form to the taxpayers.
Furthermore, Goolsbee (2002) confer benefits of e-tax filing to service providers, which are the
tax authorities. To the service provider, e-tax filing minimizes their workload and operational
cost due to the submission of tax returns in a paperless environment. It also reduces the cost of
processing, storing and handling of tax returns.
In addition, as Moyi&Ronge (2006) affirmed on their study on Taxation and Tax Modernization
in Kenya, e-tax filing enhances administration through measures such as entrusting sensitive
negotiations to special teams; minimizing contacts between tax payers and tax collectors and
reducing the discretionary powers of tax officers; setting up supervisory systems with at least
three hierarchical levels to reduce benefits for collusion; and devise incentive systems that match
public and private interests.
Joanna (2014) in her study on implementing electronic tax filing and payment in Malaysia, stated
that E-tax filing system increase the quality and quantity of information available to tax officers,
enabling them to complete transactions faster and more accurately. Returns filed electronically
have much lower error rates than paper returns and substantially cut the need to impose penalties
and other punitive measures to foster compliance. The more efficient handling provided by
electronic returns allows tax officers to issue assessments and refunds more quickly, and

17
taxpayers know right away if their returns have been accepted by the tax authorities. E-tax filing
lowers the cost of handling returns—allowing administrative resources to be reallocated to other
tasks such as auditing, customer services and tracking non-compliance.
The study extends in stating e-tax filings benefits in allowing for better, safer data storage that
can be used to implement a risk management system for auditing and enforcement. Automation
helps establish a good system for tracking files, which is essential for effective auditing and
increases the speed and quality of data provided to auditors. Taxpayers can correct their mistakes
or make and save changes many times before the final submission which diminish tax authorities
checking work load. Finally, well-designed electronic systems can lower corruption by reducing
face-to face interactions.
E-tax filing also benefits in better access to information, employee productivity and improved
service delivery. Strategic benefits are generally impossible to quantify in monetary terms, but
their value is undoubtable. For example, Business Analytics is one example where data
warehouse that can be queried to collect customized data on segments of constituents available
for their decision-making process (Kavanagh, 2007).
By using electronic filing system governments expect to achieve such gains as online data
collection to reduce data entry costs and automate error checking, reduce the communication
costs with citizens, enhanced uniformity in the treatment of the applications, greater re-use of
data, reduce government publication and distribution costs through online publication (OECD
2003).

2.1.9. Challenges of using Electronic Tax Filing system

Sweeney et al., (1999), on their study about the role of perceived risk in the quality-value
relationship substantiate that tax authorities face some major challenges towards the
implementation of the e-tax filing system. One such challenge is the public perception of the etax
filing system. After using an e-service over the Internet, the public may find the e-service system
easy and useful or otherwise. Since the public cannot directly communicate with tax personnel,
see or touch the tax forms as the service is provided online, the e-tax filing service system
delivered to them may not perform as expected. In addition, the public may be burdened by the
time and effort spent learning the new system and accommodating any services failure. Although
time is a non-monetary effort and varies among individuals, researchers have recognized that
time is a cost that users must pay for any use of services.

18
Another challenge regarding public perception was stressed out by Chang et al. (2005) as
perceived credibility on their study about the impact of quality antecedents on tax payers’
acceptance of Internet tax-filing systems. The study defined perceived credibility as the extent of
users’ confidence in the Internet tax-filing system’s ability to protect the user’s personal
information against computer hackers or cyber-crime as it is popularly known. A credible
website needs to safeguard personal information from unauthorized access or disclosure,
accidental loss and alteration or destruction.
Therefore, as Joanna (2014) said reluctance of taxpayers to abandon paper-based processes
because of their perception and shift to electronic system is one of the reasons which make the
number of taxpayers using the e-tax filing system remained far below expectations.
Another major challenge supposed by Anna &Yusniza (2009) on their study on the adoption of
tax e-tax filing in Malaysia, is to ensure that the system runs smoothly and efficiently during the
tax filing period each year. This refers to the technical aspects of e-tax filing, i.e. computer and
information systems utilized for the e-tax filing system need to be stable and reliable enough to
handle a amount of information processing, especially during the peak period of e-tax filing and
particularly as the deadline approaches. The service provider has to ensure that the e-tax filing
system can handle the heavy processing of data during the month of tax submission without any
glitches. Another critical issue on e-tax filing is that the tax authorities have to ensure that the
confidentiality and privacy of the information submitted through the Internet is preserved.
Tamami (2006) on his thesis done in Washington, D.C. titled “An analysis of the effect of
electronic filing on individual income tax compliance” stated that since there is no perfect system
anywhere, there should be a helpline and other forms of real time support for taxpayers who may
encounter problems in using the system. Also, there should be detailed help manual on how to
complete tax forms. Where necessary there should be free downloadable software on the website
for preparing tax returns.
Having and retaining good IT staff members was also given emphasis by Korpela et al. (2000)
on their study about the commercial scenarios for the web: Opportunities and Challenges. The
study implies the methodologies for developing information systems, generally, are taught
mostly in academic and professional institutions in developed countries and focus on
organizations with relatively abundant resources and other favorable conditions. For example, a
group of researchers note that information system development practices need modification to

19
work in local African conditions. “The information system development practices and
methodologies being taught and used in industrialized countries have been designed with a much
more affluent and less constrained setting in mind than which African information and
communication technology (ICT) actors find themselves in. Information system development
practices are not universal as such, but need to be adjusted to any given socioeconomic, cultural
and organizational setting”.
As stated by Mongwaketse (2015) on his MBA paper titled “Perceived effects of an electronic
filing system on tax compliance in a district municipality, South Africa”, e-tax filing system is
not completely independent of human intervention and taxpayers cannot perform certain
functions online, and as a result they still need to visit tax offices and queue for assistance. One
such example is tax registration. The taxpayer can perform tax registration online, but afterwards
is required to visit the office in order to show supporting documents or for payment.

2.2. Empirical Evidence

AntenehTamiru, 2021, the Practice and Challenges of E-Tax Implementation in Ethiopia: The
Case of Ministry of Revenue (MOR) Large Taxpayers Office. The goal of this study was to look
into the prospects and challenges of e-filing major tax payers in Ethiopia. To accomplish this
goal, descriptive study was conducted using a Likert scale questionnaire and interviews from the
Ethiopian Ministry of Revenue Large tax payer’s office. A systematic sample technique was
employed on 260 tax payers. According to the study, some of the practical challenges that
taxpayers face when using e-filing include unreliable e-filing service, system inefficiency
because it isn't fully operational, and e-filing isn't well supported by an e-payment supplementary
system, so taxpayers are still forced to visit the tax office. The findings revealed that electronic
tax filing systems improve tax payer satisfaction and save time by avoiding emotional stress
caused by long lines, as well as making them more efficient and effective because they can
administer their own taxes and create flexibility in recording tax credits and refunding tax at any
time. The study advised that the tax authorities improve the quality of the system by offering an
electronic registration, clearance, and payment method.
Hiwot Muluken, 2020, challenges and opportunities of adopting electronic tax payment system
in Ethiopian ministry of revenue this research focused on assessing the challenges and
opportunities of adopting the E-tax Payment system in Ethiopian Ministry of Revenue (MOR).
The study has employed a descriptive research design. The result of the study indicated that

20
incorrect data entering into the system, no technical support on time, low level of internet
connection, network failures and frequent power interruptions were found as a major challenge
of adopting e-tax payment system. However, the cost of IT equipment and cost of the internet
was not found as a barrier. The study also identified basic benefits that MOR and taxpayers
could attain from the adoption of E-tax payment system such as speed up tax collection process,
reduce transaction cost, improve transaction speed, provide timely information on payment,
minimizes the risk of cash theft and embezzlement, increases operational efficiency, and create
better relationship between taxpayers and tax office.
PatnaikDr at el, 2020, Adoption of electronic taxing system in Ethiopia: reflections of barriers
and drivers. The study investigated the adoption of E-taxing by tax revenue authorities in
Ethiopia regarding the barriers which can affect the authorities from taking advantage of E-
taxing system and anticipated benefits derived by adopting the system. The result of the study
indicated that, the major barriers of Ethiopian taxing authorities face in the adoption of electronic
taxing are, frequent power interruption, tax payers’ low levels of computer literacy, lack of
sufficient government support affect tax payers’ willingness lack of uniform platform by tax
authorities for adoption and growth of E-taxing technology in Ethiopia, lack of skilled manpower
exist in tax revenue authorities, limitation in network infrastructure. Lack of enough
coordination, interaction and cooperation between tax revenue authorities and other decision
making/like ETC and EELPA centers in e-taxing context and lack of legal framework for e-
taxing for implementation and growth of E- taxing technology in Ethiopia and the benefits are E-
taxing to improve customer service and satisfaction-taxing wish to satisfy rapid change of
customer/tax payers need and preference, E-taxing to improve the relationship with customer and
E-taxing to cover wide geographical area for the development of E-taxing technology, increases
Productivity of the tax revenue authorities decrease the work load of makers, reduces Adoption
of Electronic Taxing System in Ethiopia.
Tadele Asegdew, 2020.The effects of electronic filing system on tax payers compliance: in the
case of ministry of revenue. The main objective of this study was to assess the effects of
electronic tax filing system on tax payer’s compliances. The descriptive findings revealed that
majority of large taxpayers do not have enough awareness on e-tax filing and tax compliance.
The inferential statistics results indicate that perception and knowledge towards e-filing have
positive and significant effect on tax compliance

21
Matheos, 2023 Factors affect adoption and usage of electronic tax system. The aim of this
research is to assess the adoption and usage of electronic tax system in the case of large
taxpayers in Addis Ababa city through the implementation of unified theory of acceptance and
use of technology (UTAUT) model with the addition of web quality, awareness, anxiety and
perceived risk. Data for the study were derived from 384 respondents and analyzed by using the
ordered logistic model. The research findings revealed that performance expectancy (PE), effort
expectancy (EE), social influence (SI), awareness (AW), web quality (WQ) and perceived risk
(PR) significantly affect intention and usage of the electronic tax system. The study recommends
that since the adoption of the electronic tax system is a new environment for both government
and taxpayers in Ethiopia, the Ethiopia Revenue Authority (ERA) should take into consideration
that factors affect the intention to use as well as the usage of an electronic tax system.

2.3. Research Gap

As per knowledge of the researcher, In Ethiopia’s context, electronic tax filing system has been
addressed by few studies such as the Practice and Challenges of E-Tax Implementation in
Ethiopia: The Case of Ministry of Revenue (MOR) Large Taxpayers Office, , challenges and
opportunities of adopting electronic tax payment system in Ethiopian ministry of revenue this
research focused on assessing the challenges and opportunities of adopting the E-tax Payment
system in Ethiopian Ministry of Revenue (MOR). Adoption of electronic taxing system in
Ethiopia: reflections of barriers and drivers by PatnaikDr at el, 2020. Tadele Asegdew , 2020.The
effects of electronic filing system on tax payers compliance: in the case of ministry of revenue,
Factors affect adoption and usage of electronic tax system. The aim of this research is to assess
the adoption and usage of electronic tax system in the case of large taxpayers in Addis Ababa
city by Matheos, 2023. From the literature examined, studies show inadequacies in the way
provides a theoretical analysis of the hindering factors on failure to achieve full potentiality on e-
tax filing revenue in Ethiopia. The researcher also feeling that no adequate study has been carried
out on the E-tax filing which affect tax revenue in Ethiopia. Therefore, a research gap exists that
need to be filled by doing a thorough survey on the factors affecting E- tax filing revenue in
Ethiopia in general and in Addis Ababa special.
2.4. Conceptual Framework of the Study
The conceptual framework for the study was developed from the researchers’ view of the
interactions that could exist between the variables of the study based on the review of the

22
literature. The model proposes a direct relationship between the independent variables and the
dependent variable. The dependent variables are E-tax filing effectiveness and the independent
variables are performance expectancy (PE), effort expectancy (EE), Web quality (WQ),
Information system (IS) and E-Tax Legislation System (TLS).

Independent variable Dependent variable

Performance expectancy (PE

E-tax filing
Effort expectancy (EE) effectiveness

Web quality (WQ

Information system (IS)

E-Tax Legislation System (TLS)

Figure 1: Conceptual framework

Source: by researcher, 2024

23
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
This chapter deals with the research methodology that will be used in the study. It contains the
research design, population, sources of data, data gathering instruments, and methods & data
presentation and analysis procedures.

3.1. Research Design

This study will focus on factors affecting E- tax filing effectiveness, case of Addis Ababa large
tax payer’s branch office. To this effect, descriptive survey method will be employed with the
assumption that it can help to describe the current practice of e-tax filing system in Addis Ababa
large tax payer’s branch office. According to Creswel (2004), a descriptive study research refers
to a body of techniques for collecting data and obtaining responses from individuals to a set of
prepared questions. Descriptive study technique with self-administered questionnaires as the
survey instrument is considered appropriate for this study in order to provide a quantitative or
numeric description of trends, attitudes, or opinions of the population.

3.2. Research Approaches

There are two basic approaches to research they are quantitative and qualitative research. A
quantitative research approach helps the researcher to produce data in measurable analysis. The
second is a qualitative approach helps the research for subjective assumes of behavior, opinion
and attitudes research. The methods used in the study to gather data will be observation of filled
works and secondary data will policy documents and yearly reports which assisted to get

24
important data for the study, questioner which contains both open ended and close ended
questions.
Interview with tax officers will be conducted. Therefore, the study will use the mixed approach
as both quantitative and qualitative methods. (Kothapc, 2004)

3.3. Source of data

Data sources for this study will include both primary and secondary data. Primary data are data
gathered for the first time by the researcher him/herself. It includes interview, personal
observation, and other different firsthand information obtained from sources. Whereas,
secondary data are data which are already existed before the researcher finds them. These data
are created, collected or gathered by some other person. Secondary data include documents,
publications, technical journals, books, magazines, newspapers, periodicals and reports which
will found from the office. Therefore, the researcher will employ both primary and secondary
data sources.
3.4. sampling design

3.4.1. Target population

The first stage of the sampling process is identifying the target population. Populations of the
study are Addis Ababa revenue large tax payer branch office employees, team leaders from all
department, department heads, and managers will be subject of the study. The total number of
employees is above 273 working in the different divisions such as the tax assessment
department, tax audit department, customer service and records and other departments.

Table 1: Employees target population

Strata Target population

Tax assessment department, 87
Tax audit department, 54
Customer service and records 116
Managers 16
Total 273
Source: Addis Ababa Large Taxpayers branch Office Human Resource Department, 2024

25
3.4.2. Sample size
This study will apply a simplified sample size determination formula provided by Yamane
(1967) in order to determine the required sample size at 95% confidence with the level of
precision 5% (Yamane, Taro, 1967). This sample size determination method is more applicable
when the sampling population is known and finite and it is also statistically permutable to
commit 0.01 to 0.1 level of bias in study process.
To determine the required sample size the following Yamane formula will be applied in this
study below: -
n = N
1+N (e) 2
Were,
n - is the sample size
N - is the population size
e - is the level of precision (sampling error)
Addis Ababa large tax payers’ office employees will be taken as the target population of the
study. The office employees are totally 273. Simple random sampling will be used to select
sample from large payer branch office employees.
From Employee
(1) Therefore, the sample size of this study will be
n = 273
1+273(5%)2 =163
Were
n - is the sample size, = 163
N - is the population size, = 273
e - is the level of precision (sampling error) =5%

Table 2: employees targe population and sample size

Strata Target population Sampling size

Tax assessment department, 87 52
Tax audit department, 54 32
Customer service and records 116 69

26
 Managers 16 10
Total 273 163
Source: by researcher, 2024

3.4.3. Sampling Techniques

The study will employee both probability and non- probability sampling techniques to select
participants of the study. Under probability sampling simple random sampling will be used to
select employees from the office. And under non-probability sampling purposive sampling will
be employed. The reason to use non- probability sampling technique is in order to ensure the
representation of respondents from each department and simple random sampling is in order to
select employees of the office.

3.5. Data Collection Instruments

The primary data of this study will be collected using a structured self-administered five-point
Likert scale questionnaire. Thus, quantitative and qualitative methods of data collection
instruments believed to give rich information about the case under study. For this paper, three
data gathering instruments will be used these are questionnaire; interview and document reading
employed in order to gather the necessary information. The structured questionnaire is a
document that is used to collect data from respondents. This questionnaire type consists of
standardized closed questions, that are worded in a specific way, asked in a set sequence and
require respondents to choose from a set of predefined answers. A 5-point Likert scale is a
psychometric response method where respondents can easily answer questions and state their
level of agreement in five points. The 5-point Likert scale consists of the below points – (1)
Strongly Disagree; (2) Disagree; (3) Neither Agree nor Disagree; (4) Agree; (5) strongly Agree.

3.6. Methods of data analysis

This part of the paper deals with presentation; analysis and interpretation of data will be
collected through questionnaire, interview, and document. Quantitative analyses will be
presented in descriptive manner according to the items in the questionnaires and interview and
document guiding. The respondents’ data will statistically analyze using Statistical Package for
Social Science (SPSS) version 20. Tables will be use to ensure easy and quick interpretation of

27
data. Descriptive statistics will be used to analyze all data gathered in the form of frequencies,
percentages, mean and standard deviations.

3.7. Reliability and Validity of the Instruments

3.7.1 Validity

Validity refers to the extent to which a test measures what we wish to measure. To improve the
validity of the questionnaire, the questionnaire must be reviewed and modified by experts and
piloting the questionnaires so that the questionnaire was finalized in a defect-less version Kothari
(2004, p 73).
The questionnaire of this study will be developed based on reviewing research literature and then
be reviewed and modified by experts to improve its validity. The theories and information used
are credible which can also be checked out by using the names of the scholars and the year of
publications. The questionnaires were distributed and submitted right at the spot which is useful
in making sure that the information given is provided to the best of the knowledge and free from
the influence of other people. To guarantee that the data was collected is free from human error,
data analysis software; SPSS 20 will be used.
3.7.2 Reliability

It is very important to measure the reliability of assessment tools to bring stability and
consistency to research results. Reliability is the degree to which measures are free from random
error (the difference between the sample value and the true value of the population means) and,
therefore, provide consistent data (McDaniel, 2010).

The Cronbach's coefficient alpha is a scale used to measure the reliability of measures. The alpha
coefficient scale ranges from 0 to 1 and according to the scale the higher the score, the more
reliable the generated scale is. Nunnally, J. & Bernstein, I. (1994) have indicated 0.7 values to be
the minimum acceptable reliability coefficient.

3.8 Ethical Considerations

Involved respondents will be entitled to the right of privacy and dignity. This research will be
conducted ethically. The data collection and analysis process will be done in an ethical manner
where the respondents are asked to participate in the questionnaires voluntarily and they will not

28
ask to fill in their names and other confidential information. The information collect in this
research is only used for educational purposes only. Furthermore, the findings of this study will
be reported in aggregated form, thus no individual respondent can be identified.

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