An Assessment of Revenue Generation Capacity in Gambella Region: Achievements and Constra ints
No Thumbnail Available
Date
2007-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
Fiscal deficit is a common characteri sti c of developing countri es. Parti cularl y, Sub
Saharan Afri can co untri es have difficulty in generating revenue to cover thei r
expendi tures due to weak tax adm in istration, tax evasion and corruption problem.
Ethiopia also shares this feature of fi scal defi cit, whi ch is always financed through
ex ternal assistance, and regions usually depend on fed eral grants for their ex penditures.
For example, in the year 93/94-97/98 regions co ll ected less than 20% of the national
revenue, whereas regions accounted from 34 to 44%. of the total expendi ture in the
co untry and they only covered · 25 · to 35% of ·the ir ex penditures from their revenue.
Among regions themselves, fi scal capaciti es vary. Some regions generate more than
others do wh ile some regions generate less. Tn 97/98-99/00, the federal grants coverage
ranged from 94:36% in Gambe lla to 9.47% in Add is Ababa whi ch implies that Gambella
generate less revenue than its expenditure in the country.
Then the objective of this research is to examine the performance of revenue and revenue
generation constraints in the Gambella region from 93/94-04/05. This study is a mi xed of
explanatory and descripti ve researches where secondary and primary c1ata were used. The
primary data were collected through depth i nterview a nd focus group discussion from
people that have experience in tax admini strati O:n. Sonie community lead ers who were
involved in tax co ll ection were also interviewed indi viduall y. The research fi ndings
showed that Gambel la region in 00101-04/05 covered only 7.6% of its ex penditure while
92.4% of its ex penditure is covered by federa l grants. During 00101-04/05 the federal
grants coverage ranged from 92.36% in Gambella to 98% in Addis Ababa. Hence,
Gambella depends highly on federal grants of all the regions due to low in stituti onal
capacity, low economic base and poli tical instabi lity.
In order for the region to reduce this dependency on federal grants, it should increase its
revenue by alleviating political instabilities in the region; and weaknesses in in sti tu tion
such as weakness in audit, accounting and monitorin g and evaluation systems of revenue
department of the region. Incentives mechani sms for tax payers to pay more tax are also
needed to collect more tax in the region.
Description
Keywords
Revenue Generation Capacity