An Economic Study of Tax Reforms and Effort in Ethiopia
No Thumbnail Available
Date
1998-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
Ethiopia as a low income country has encountered problems of
Fiscal deficits and limited capacity for tax administration. The
Country has been undertaking lots of tax reforms since 1940s as
One strategy to deal with these problems. Tax reform, a change
•
In status quae, is needed when the existing tax system is
Deficient in achieving its objectives revenue adequacy,
Efficiency, equity and administrative feasibility. This study
Discusses: why tax reforms since 1940s were necessary? When were
Such reforms carried out? And how were they implemented? Using
Time series data, the study also determines tax effort indices
Based on aggregative regression approach.
The analysis suggests that tax reforms in Ethiopia, during the
Past five decades, has largely aimed at increasing revenue, both
Through rate increasing and base broadening, rather than
Improving efficiency. And the tax effort indices that tell us
To what extent the country was capable of raising tax revenue
. ~
Suggest that Ethiopia has almost succeeded in exploiting its tax
Base on the average. This is because tax effort indices for
Different periods were found to be almost unity. And the degree
Of openness of the economy, as measured by the relative size of
Foreign trade, the level of income, as peroxide by per capita
Income and the economic structure particularly the relative size
Of agriculture, are found to be important factors that determine
The taxable capacity of the country.
Description
Keywords
Economic Study of Tax Reforms, Effort in Ethiopia