Factors Influence Tax Revenue in Ethiopia
No Thumbnail Available
Date
2016-12
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
Tax revenue to GDP ratio is very low in Ethiopia as compared to some of Sub-Saharan African
countries. In this study an attempt is made to analyze empirically factors influence tax revenue
such as broad money supply, exchange rate, urbanization, import, foreign remittances, and
mining share in GDP so as to assess the response of tax revenue to changes in its factors in
Ethiopia. The study is essential because its results can be used to help policymaker take
appropriate measure when raising tax revenue and also used in making appropriate tax reform
in an event of budget deficit. The study mainly used secondary data collected over the period
1997-2015 from Ministry of Finance and Economic Cooperation (MoFEC), Central Statistical
Agency (CSA), and National Bank of Ethiopia (NBE). For the present study, both descriptive
statistics and econometric tools were employed to analyze and present the obtained data. The
results obtained suggest that broad money supply, and exchange rate are positively significant in
influencing tax effort in Ethiopia. But the results indicate that import in GDP is statistically
insignificant factor to influence tax effort in Ethiopia. Finally, it is found that Ethiopia’s tax
revenue is very responsive to change in its factors which create more challenge to the
government in creating a stable tax system
Key words:s factors; tax revenue; time serie
Description
Keywords
Factors; tax revenue; time serie