An Assessment on the Major Substantive Design Aspects of Ethiopian Excise Tax Law
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Date
2001-09
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Addis Ababa,University
Abstract
An excise tax, if designed and implemented properly, has various socio-economical advantages. In this connection, the research has the objective of evaluating the Ethiopian excise tax law with a particular attention on its central substantive design aspects.
The research has, therefore, employed a doctrinal legal research method in order to analyze the core design issues informing an excise tax law generally and Ethiopian excise tax law in particular. To this end, both primary and secondary sources of data are utilized. Therefore, the author consulted authoritative legal documents (constitution, proclamations and directives) persuasive literatures and explanations (books, journal articles, academic publications, researches, website sources and interviews’).
The research has found out substantive design problems under the Ethiopian excise tax law. This includes its predominant use of ad-valorem charging method for unhealthy items like tobacco and alcoholic beverages, an indiscriminately extremely higher rate of tax and the consequent complexity in imposing excise tax on vehicles, imposition of excise tax on large list of items and its neglect on the adverse effects of the tax imposed on essential inputs for the entertainment industry, like camera, and on non alcoholic beverages.
Based on the findings of the research important recommendations are suggested. First it is essential to make the law simple, objective oriented and ease administration, by utilizing specific charging method for those items considered harmful, simplifying the complexity followed in imposing the tax on vehicles and reducing the higher tax imposed on such essential utility vehicles like tractors. Secondly, a due consideration should also be given to the effect of the tax on the overall economy and its effect on employment and investment when taxing items like sugar, salt, non-alcoholic beverages and essential inputs of the entertainment industry.
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Keywords
Excise tax, Consumption, Ethiopia, Design aspects,