Public Management

Ethiopia reaps rewards of tax policy reform, according to research from the African Development Bank

Monday, 06 May 2019 13:24
Ethiopia reaps rewards of tax policy reform, according to research from the African Development Bank

(AfDB) - Revenue collection in Ethiopia has increased significantly after the government implemented tax reforms to boost resources.

These findings were revealed at a workshop hosted by the African Development Bank and a high-level delegation from the Ethiopian government.

A study found that the introduction of electronic cash registers increased value added tax (VAT) collections and payments by about 32%, with variations by sectors of activity, size of firms and locations. This increase can be considered large. However, given the low tax base, there is significant scope to mobilize domestic resources by accelerating reforms, notably on the use of third-party information on taxpayers, promoting electronic tax filing and payment systems, and enhancing analytical capacity using comprehensive national databases.

The workshop formed part of the Bank’s commitment to helping the government fund its ambitious development plans.

In this regard, the Bank conducted original research to evaluate the impact of major tax policy reforms in Ethiopia, in collaboration with the Ethiopian Development Research Institute (EDRI) and the Ministry of Revenue and the Ethiopian Customs Commission (formerly Ethiopian Revenue and Customs Authority). The research findings were discussed during a half-day dissemination workshop in the Ethiopian capital, Addis Ababa.

Similarly, an innovative study based on a randomized field experiment revealed that the threat of being audited could increase tax payments by 38%, while moral persuasion could increase collections by 32%. These findings will expand the authorities’ tax reform policy options, particularly those related to voluntary compliance.

In his opening remarks, the Minister of Finance, Ahmed Shide, said the studies were “very timely and vital to complement the government’s reform efforts to enhance tax collection.” Other government officials at the workshop included H.E Adanech Abiebie, Minister of Revenue, H.E Dr. Eyob Tekalign, State Minister of Finance, and H.E Zemdie Tefera, State Minister of Revenue.

The Bank was represented by Mr. Gabriel Negatu, Director General; Dr. Abdul Kamara, Country Manager; Dr. Abebe Shimeles, Division Manager; and Mr. Francois Nkulikiyimfura, Chief Governance Officer. Negatu said the evidence-based policy dialogue was in line with the institution’s ambition to become Africa’s premier knowledge institution.

The African Development Bank will seek to provide technical assistance to support the authorities in implementing the research findings. The assistance will complement ongoing advisory services to support reforms, notably to the Public-Private Partnerships Framework and the logistics sector. Additional assistance is being designed to advance financial sector development, industrial policy and strategy development, and the mining and petroleum sectors.

Beyond implementing the emerging policy recommendations, the Ethiopian government and the African Development Bank pledged to explore additional areas for impactful policy research on domestic revenue mobilization, in line with the mutual commitment to improving the quality of life of the people of Ethiopia.

35232 of tax policy reform according to research from the African Development Bank

Additional Info

  • communiques: Non
  • couleur: N/A
 
Finance


 
Telecom


Ecofin Agency covers the news from 9 business sectors in Africa: Public management, Finance, ICT, Agribusiness, Electricity, Mining, Oil and Gas, Comms and Laws. Ecofin Agency is also creating and management specialized medias, in paper and on the web/social networks, for institutions or African publishers.

AGENCE ECOFIN

Mediamania Sarl
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11

REDACTION
redaction@agenceecofin.com

Public management
Aaron AKINOCHO
Borgia KOBRI
Moutiou ADJIBI

Finance
Idriss LINGE
Walid KEFI
Chamberline MOKO

Agribusiness
Espoir OLODO

Electricity
Gwladys JOHNSON

Oil and Gas
Olivier DE SOUZA

Mining
Louis-Nino KANSOUN

ITC 
Muriel EDJO

Comms
Servan AHOUGNON

Cameroon
Brice R. MBODIAM
Sylvain ANDZONGO
Monique MAY
Julienne Rose SENDE

Togo
Fiacre E. KAKPO
Waliyullah TAJUDEEN
Séna AKODA

Niger
Sandrine GAINGNE

Gabon
Stephane BILLE
Pierre-Celestin ATANGANA

Desk
Stéphane ALIDJINOU
Souha TOURE
Vahid CODJIA
Diane ZODEHOUGAN
Hikmatu BILALI

Translation
Schadrac AKINOCHO
Mouka MEZONLIN
Firmine AÏZAN



Digital
Omar SOKHNA
Mamadou DIOP
Bacary MANE
Abdel Razak MOULIOM

Digital Marketing
Jérémie FLAUX
Geraud ACHI
Jean Christian BERNARD
Franck FOUTE

Web publishing
Bakoly RAHARISOA
Rina RAMANANDRAISOA
Hasina RAJEMISON

Development
Dominique FLAUX

 


 
REGIE COMMERCIALE
AGENCE ECOFIN
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11
Fax: +41 22 301 96 10

Benjamin FLAUX
bf@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72

Voir page 
Nos services
 

 










 



Ecofin Agency is a news agency for economic and sectorial information. It was created in 2010 and it website was launched in June 2011.

Please publish modules in offcanvas position.