Determinants of Tax Revenue in Ethiopia
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Date
2015-05
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Addis Ababa University
Abstract
The focus of paper is to identify determinants of tax revenue in Ethiopia by using a secondary data and multiple variables regression model. The objective of the study was to identify determinants of tax revenue such sectors of economy like agriculture, industry and service, FDI,
inflation rate, interest rate, per capita income and trade openness. A study is important to identify significant variables affecting tax revenue. The research approach adopted in this thesis includes series data set that consists of fifteen years. The time period covered was 1999/00 to 2013/14; this is primarily due to unavailability of organized data before the indicated period.
Both descriptive statistics and econometric tools were employed to analyze and present the obtained data. The findings from this research provide evidence that, foreign direct investment to GDP percentage regression result shows negative significant, Industry sector in percentage of GDP positive and significant, Inflation negative but not significant, Per capita income has the positive sign which is significant, and saving interest rate have positive
insignificant impact on tax revenue. The main conclusions drawn from this study are, foreign direct investment to GDP, Industry sector in percentage of GDP and Per capita income have significant impact on tax revenue. This paper recommends that inflation rate and saving interest rate are in significant variables affecting tax revenue.Key words: Tax, Determinant of tax revenue, time series, Ethiopia
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Keywords
Tax, Determinant of tax revenue, Time series, Ethiopia