This study examines the effect of tax audit on revenue collection performance evidenced from ERCA-LTO. The objective of the study is to examine the effect of tax audit on revenue collection performance. In doing so, tax audit is measured by nine variables (tax audit resources, audit case selection, capacity of auditors, tax protection system, tax automation, and tax evasion, and tax compliance, amount before and after audit). The study uses explanatory research design and mixed research approach with secondary data utilized over the study period 2005-2011 E.C (7 years). The data is collected both from primary and secondary source of data. More specifically, the study adopts a multiple regression model. The finding of the study reveals that; tax compliance, revenue protection system, and tax automation has positive and significant effect on revenue collection and statically significant at 1%, 1% and 5% significant level respectively. Furthermore, audit case selection and auditors capacity has a positive and significant effect on revenue collection performance at 10 percent significance level. Apart from this, the variable tax audit resource, tax evasion and before audit amount has a negative effect on revenue collection and statically significant at 1 percent significance level. On the other hand the amount after audit has positive and insignificant effect on revenue collection performance.
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