The focus of the paper was to examine factors that affect the effectiveness of tax collection for category C taxpayers in Wolkite town. The study intended to examine the dynamics that affect the effectiveness of the tax collection system. The study addresses variables such as tax compliance, tax awareness, the income of the individuals, tax evasion, and avoidance. The study used a primary source of data and multiple regression models. Descriptive statistics and SPSS tools were used to analyze and present the collected data. As per the findings of this research paper in regression result tax awareness shows as a negative and insignificant, tax compliance positive and significant, the income of individuals has a significant and positive sign, and tax evasion and avoidance have a positive and insignificant impact on the tax collection effectiveness. Whereas, income tax compliance and income of individuals have a significant impact.

Keywords: Category ‘C’, factors of tac collection, Gurage Zone