Tax to gdp ratio of ethiopia pdf

Tax revenue collection of the federal government is expected to. New oecd data in the annual revenue statistics 2019 publication show that on average, tax revenues as a percentage of gdp i. At around 15 percent, subsaharan africa has one of the lowest ratios in the world, significantly below the 24 percent average in oecd countries. The federal democratic republic of ethiopia international. This paper investigated empirical evidence on contributions of tax revenue for economic. Public disclosure authorized manufacturing services. The average taxtogdp ratio for the 16 countries covered in this second edition of the report was 19. Pdf employment income tax in ethiopia amanuel tsegaye. In this type of tax system all incomes are taxed at a single uniform rate, irrespective of whether tax payers income is high or low. Determinants of tax revenue in ethiopia united nations economic. Ethiopia has recorded annual average gdp growth of about ten percent in the last decade, driven by public investments in agriculture and infrastructure.

Lessons for tax reform what does georgias experience teach us about. Chapter one introduces students to the basic concepts, principles and underlying assumptions of the many tax laws of ethiopia at present. The introduction of vat aimed at enhancing economic growth and improving revenue performance measured in terms of government revenue to gross domestic product gdp ratio fdre 2002. Fiscal consolidation has ensured low and stable fiscal deficits, despite a low taxgdp ratio, averaging 11% during 201619. The national bank of ethiopia nbe with a view of maintaining inflation at low and single.

The low tax gdp ratio, however, indicates the existence of modest tax burden and. This is due to tax non compliant behavior of tax payers and inefficiency of the tax authority. History of the postwar ethiopian fiscal system africa portal. This page provides ethiopia government debt to gdp actual values, historical data, forecast, chart, statistics, economic calendar and news.

Ethiopia government debt to gdp 19912019 data 2020. Tax revenue to gdp ratio is very low in ethiopia as compared to some of subsaharan african countries. The target population for this study consisted of the quarterly reports on the state. Ethiopia introduced vat as a replacement to sales tax in the year 2003. The research design adopted in this study was causal study. The poverty rate has fallen from 44 percent in 2000 to 23.

Tbilisi, georgia, where reform helped broaden the tax base. The studys objective was to determine the effect of value added tax on economic growth in kenya. Tax revenue to gdp ratio is very low in ethiopia as compared to some of sub saharan african countries. Democratic republic of ethiopia, the following documents have been released and are included in this package. In this study an attempt is made to analyze empirically. The taxtogdp ratio is the total amount of taxes collected by a government divided by the countrys gdp. National bank of ethiopia 2 201718 annual report general government expenditure showed a 7. The result revealed that in the long run real gdp per capita income, foreign aid and industrial value added share of gdp positively and significantly affect tax. Gross national income for ethiopia mktgnieta646nwdb.

Tax revenue is defined as the revenues collected from taxes on income and profits, social security contributions, taxes levied on goods and services, payroll taxes, taxes on the ownership and transfer of property, and other taxes. Global finance magazine ethiopia gdp and economic data. Tax revenue % of gdp international monetary fund, government finance statistics yearbook and data files, and world bank and oecd gdp estimates. Table 1 2019 ethiopia recent developments november and. However, the external current account deficit, estimated at 10. As a percentage of gdp it was below the average sub saharan african countries. Tax is a compulsory payment made by an individual or a corporate establishment legal entity to the government. The average tax togdp ratio for the 16 countries covered in this second edition of the report was 19. Analysis of tax buoyancy and its determinants in ethiopia. Addis ababa, ethiopia 12 october 2017 revenue mobilisation in africa continues to improve, says new report. This statistic shows the share of economic sectors in the gross domestic product gdp in ethiopia from 2008 to 2018. Therefore, there is an immediate need for advancing tax reforms and improve capacity and quality of tax administration. Schedule a employment income per month tax rate in % deduction in birr over birr to.

Graph and download economic data for gross national income for ethiopia mktgnieta646nwdb from 1981 to 2018 about ethiopia and gni. For example, if indias tax gdp ratio is 16%, it means that the government gets 16% of its gdp as tax contribution from the public and entities. The statistic shows gross domestic product gdp in ethiopia from 1984 to 2018, with projections up until 2024. According to undp 2014 half of ssa countries rose 16. Performance and prospects of tax collection in ethiopia undp. This payment is usually a small percentage of a total earning, made to assist the government in offsetting its. Pdf estimating tax buoyancy and stability in ethiopia. Tax gdp ratio shows the tax revenue for a country measured in terms of gdp.

Calculated by applying the unweighted average percentage change for 2015 in the 32 countries providing data for that year to the overall average tax to gdp ratio in 2014. Ethiopias ratio of tax revenue to gross domestic product gdp is still well short of the international average. Accordingly, the material deals with the following. The improvement in the countrys ability to mobilize revenue between 2004 and 2011 is all the more impressive given the sharp reduction in tax rates. When tax revenues grow at a slower rate than the gdp of a country, the taxtogdp ratio falls. Browse additional economic indicators and data sets, selected by global finance editors, to learn more about ethiopia. June 22, 2016, with the officials of the federal democratic republic of ethiopia on economic developments and policies. The gross domestic product gdp in ethiopia was worth 94 billion us dollars in 2019, according to official data from the world bank and projections from trading economics. Data and research on tax including income tax, consumption tax, dispute resolution, tax avoidance, beps, tax havens, fiscal federalism, tax administration, tax treaties and transfer pricing.

Ethiopia is one of the fastest developing countries situated in the northeastern corner of africa. Revenue statistics in asian and pacific economies 2019. Ethiopia gross domestic product gdp 19842024 statista. Ethiopia figure 1 ethiopia real gdp growth and contributions to real gdp growth figure 2 ethiopia actual and projected poverty rates and real gdp per capita source. The taxtogdp ratio is the ratio of tax collected compared to national gross domestic product gdp. Addis ababa, ethiopia 12 october 2017 african union. With agricultural recovery, gross domestic product gdp growth rebounded in fy2017. In this article, we look at the ethiopian tax system, types of taxes in ethiopia applicable to everyone. Some countries like sweden have a high taxtogdp ratio as high as 54 percent. Accordingly, this teaching material tries to address, even though briefly, the basic component of tax law, especially in ethiopia. The tax percentage for each country listed in the source has been added to the chart. Learn how the world bank group is helping countries with covid19 coronavirus. This article lists countries alphabetically, with total tax revenue as a percentage of gross.

Tax reforms are under way to boost revenue mobilization, but deficit financing through central bank advances has. Tax revenue in ethiopia has been low throughout the study period 1974 to 2010. Financial experts have lamented the countrys tax to gdp ratio, describing it as one of the poorest in africa. Ethiopia taxgdp ratio stands at 11% by groum abate. Share of economic sectors in the gdp in ethiopia 2018. International monetary fund, government finance statistics yearbook and data files, and world bank and oecd gdp estimates. Such low level of tax revenue is certainly the outcome of the prevailing poor tax revenue mobilization mechanism, be it a matter of policy or administration. The current taxtogdp ratio is low compared to peer countries, and the tax structure would benefit from increased contributions by direct tax sources. A word or term in these regulations shall have the same meaning that it has in the.

The tax liability increases in absolute terms, but the proportion of income tax remained the same. Low tax to gdp ratio is a common feature of most ssa countries. Statistics manual gfsm standards is an urgent task. Country report 2017 includes ethiopia real gross domestic product growth rate, with latest forecasts and historical data, gdp per capita, gdp composition and breakdown by sector. In 2018, the share of agriculture in ethiopias gross domestic product was 31. Gross domestic product gdp denotes the aggregate value of. Tax revenue current lcu taxes on income, profits and capital gains current lcu customs and. This article lists countries alphabetically, with total tax revenue as a percentage of gross domestic product gdp for the listed countries. Total tax revenue as a percentage of gdp indicates the share of a countrys output that is collected by the. List of countries by tax revenue to gdp ratio wikipedia. Although the economy has been growing at a remarkable rate averaging more than 10 percent, the slow. By 2008, georgias taxrevenuetogdp ratio had doubled to 25 percent. Ethiopia economic outlook african development bank. However, there is a challenge increasing the tax revenue proportionate gdp.