Browsing by Author "Tilahun, Dereje"

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    The Challenges of Tax Incentives on Government Revenue: the Case of ERCA
    (Addis Ababa University, 2017-07) Tilahun, Dereje; Hurissa, Bikila (PhD)
    The purpose of this study is to investigate “The challenges of tax incentives on government revenues: the case of ERCA”. The study employed a descriptive research method and used both qualitative and quantitative research approaches. The primary and secondary data were gathered and used for this research. The data collected through different tools were analyzed and interpreted by using descriptive statistics tools. The finding of this study shows that the investment related tax has a significant negative effect on government revenue. This study also revealed different challenges in the administration of the investment incentives in ERCA. The legal framework is found as complex, inconsistent, unstable, and insufficient and lack coordination with administrative procedures. Similarly, administrative under capacity, non-coordination between ERCA and different organs, interventions from both internal and external bodies and lack of attention are identified as the major challenges. It is also found that incentives are prone to abuse and the authority does not have strong mechanisms of monitoring and controlling. The researcher recommended that ERCA should have a mechanism to measure the cost and benefit of tax incentives on timely manner. The tax expenditure amount should be reported timely with other reports to the concerning body to create transparent and accountable tax system. Finally, the study suggested some probable solutions including keeping the tax incentive system simple, strengthen administrative capacity, strengthening continuous audit system, improving enforcement capacity and imposing economically meaningful penalties in the case of abuse