Ethiopian Tax Research Network Library

Following the third international Financing for Development Conference, the United Nations General Assembly endorsed the Addis Ababa Action Agenda. The first action area, outlined as “critical to achieving the sustainable development goals,” is mobilising domestic public resources. Countries committed to “enhancing revenue administration through modernized, progressive tax systems, improved tax policy and more efficient tax collection.”

As a member of the Addis Tax Initiative, Ethiopia has committed to stepping up domestic resource mobilisation. Currently, Ethiopia’s tax to GDP ratio stands at about 13%, below the 15% considered necessary to fund adequate public services. Key to raising increased tax revenue in an equitable manner, and without impeding economic growth, is rigorous research that can inform both tax policy and practice.

To this end, the Ethiopian Tax Research Network (ETRN) was launched in September 2017. The ETRN is coordinated by the International Centre for Tax and Development (ICTD) and funded by the Bill and Melinda Gates Foundation. The ETRN is dedicated to enhancing the generation and exchange of tax knowledge in Ethiopia. It is concerned with all topics related to taxation, ranging from tax policy to tax administration, and from academic papers to practical case studies. This library is intended to be of use to members of the ETRN, including tax practitioners and researchers from both Ethiopian and international organisations. 

Image credit: Addis Ababa, Ethiopia - January 15, 2013 : South Africa Street has been decorated with flags for Ethiopian Epiphany Celebration | mustafa6noz | iStock

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Showing 1-10 of 62 results

  • Tax evasion and missing imports: Evidence from transaction-level data (summary)

    International Centre for Tax and Development, 2019
    Tax evasion is typically very hard, if not impossible, to measure. In the case of trade flows however, it is possible to capture it thanks to “missing imports”: the difference between the total value of exports recorded by country A to country B and the total value of imports of country B from country A. While there is no economic reason why these two values should differ, there are incentives for misreporting particularly on the importing side since imports are often heavily taxed – unlike exports....
  • Perceptions of VAT compliance in Ethiopia

    International Centre for Tax and Development, 2019
    Tax is a major source of government revenue. Many countries prioritise mobilising domestic resources to finance government spending. However, many factors influence the revenue generated by taxation, including the population’s level of compliance with tax expectations. A country’s ability to raise funds from tax depends on the level of tax compliance. Tax compliance refers to complex attitudinal issues towards all types of tax.This paper explores attitudes to compliance with value added tax (VAT) among those registered for VAT in Addis Ababa, Ethiopia....
  • Tax evasion and missing imports: Evidence from transaction-level data

    International Centre for Tax and Development, 2019
    It is well documented in the literature that developing countries raise less tax revenue as a share of their economy than their developed counterparts. Part of this gap can be explained by the relatively higher tax evasion in the former. Recent literature shows that increasing the availability of information reduces evasion, by increasing the probability of detection. However, there is little evidence to show how tax evasion responds to changes in tax rates.Using highly disaggregated trade data, we show that there is more tax evasion when tax rates increase....
  • Turnover-based presumptive taxation and taxpayers’ perceptions in Ethiopia

    International Centre for Tax and Development, 2019
    Why turnover-based presumptive taxation? The Ethiopian economy is cash-based and dominated by a large number of micro and small businesses. Hence, taxing this sector assists in raising government revenue and increasing the number of taxpaying firms.Turnover-based presumptive taxation provides a regime that simplifies the tax rules for small taxpayers and helps introduce them to the standard tax regime. Summary of ATAP 7 by Abis Getachew....
  • Perceptions of Value Added Tax filing and invoicing compliance in Ethiopia: The case of three federal branch offices in Addis Ababa

    International Centre for Tax and Development, 2019
    African governments are increasingly seeking to improve tax compliance in the pursuit of domestic revenue sources. Despite this trend, there is limited understanding of value added tax (VAT) compliance in Africa. In Ethiopia, increased VAT compliance is essential for the government to meet its ambitious domestic revenue goals. Therefore, we surveyed 652 Ethiopian VAT-registered businesses to better understand VAT compliance attitudes....
  • Practices, challenges and prospects for public sector taxation in Ethiopia

    International Centre for Tax and Development, 2019
    The tax compliance behaviour of the public sector has been largely neglected in the tax literature. Other than appearing in tax laws as taxpayers, in practice the compliance strategies employed by revenue authorities do not sufficiently cater to government agencies. Enforcement of tax payments on these agencies is generally perceived to be a difficult undertaking and of less value than other priorities. One strategy to improve tax compliance in the public sector has been to separate them from other taxpayers and to provide them with special treatment....
  • Turnover-based presumptive taxation and taxpayers’ perceptions in Ethiopia

    International Centre for Tax and Development, 2019
    This paper focuses on the perceptions of a turnover-based presumptive tax system in Ethiopia. It mainly focuses on taxpayers’ perceptions of fairness, simplicity and administrative capacity. In this study, fairness has been assessed based on seven dimensions, namely exchange fairness, procedural fairness, horizontal fairness, vertical fairness, inter-group fairness, time-related fairness and compliance fairness. Exchange fairness refers to the adequacy of the provision of public goods and services to citizens in the long run....
  • Presumptive income tax assessment of SME’s in Addis Ababa, Ethiopia

    International Centre for Tax and Development, 2019
    At their most general, presumptive taxes seek to use indirect means to assess the liability of a specific taxpayer, which differ from the usual rules based on taxpayer accounts. Many countries use some form of presumptive taxation to simplify the rules for businesses and individuals that frequently escape taxation. Ethiopia uses presumptive taxation as a simplified method of revenue collection from small informal sector firms....
  • Where the gap lay: Presumptive income tax assessment for small and micro enterprises in Addis Ababa city administration

    International Centre for Tax and Development, 2019
    This study is focused on the presumptive tax reassessment of small and micro enterprises (SMEs) in Addis Ababa City Administration that took place in 2017. The reassessment process was based on average daily revenue estimates calculated by teams of assessors and validated by a series of committees. The release of the reassessment results in 2017 led to widespread public outcry in Addis Ababa, suggesting possible shortcomings of the processes and procedures used....
  • Can ICTs increase tax? Experimental evidence from Ethiopia

    International Centre for Tax and Development, 2018
    This ICTD Research in Brief is a two-page summary of ICTD Working Paper 82 by Giulia Mascagni, Andualem Mengistu, and Firew Woldeyes. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. African tax administrations have experienced rapid modernisation in the past two decades....

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