Tax revenue collection of the federal government is expected to. This article lists countries alphabetically, with total tax revenue as a percentage of gross domestic product gdp for the listed countries. The studys objective was to determine the effect of value added tax on economic growth in kenya. 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. This article lists countries alphabetically, with total tax revenue as a percentage of gross. In the ethiopian revenue structure, it is only the share of taxes on income whose average. Ethiopia gross domestic product gdp 19842024 statista. Learn how the world bank group is helping countries with covid19 coronavirus. A word or term in these regulations shall have the same meaning that it has in the. 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.
Public disclosure authorized manufacturing services. Ethiopia economic outlook african development bank. Revenue statistics in asian and pacific economies 2019. In this study an attempt is made to analyze empirically. The current taxtogdp ratio is low compared to peer countries, and the tax structure would benefit from increased contributions by direct tax sources. 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 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. The tax percentage for each country listed in the source has been added to the chart. The tax liability increases in absolute terms, but the proportion of income tax remained the same. In 2018, the share of agriculture in ethiopias gross domestic product was 31. Financial experts have lamented the countrys tax to gdp ratio, describing it as one of the poorest in africa. Gross domestic product gdp denotes the aggregate value of.
This paper investigated empirical evidence on contributions of tax revenue for economic. However, there is a challenge increasing the tax revenue proportionate gdp. Low tax to gdp ratio is a common feature of most ssa countries. The poverty rate has fallen from 44 percent in 2000 to 23. Statistics manual gfsm standards is an urgent task. The federal democratic republic of ethiopia international. Tax gdp ratio shows the tax revenue for a country measured in terms of gdp. June 22, 2016, with the officials of the federal democratic republic of ethiopia on economic developments and policies. Share of economic sectors in the gdp in ethiopia 2018.
The research design adopted in this study was causal study. Ethiopias ratio of tax revenue to gross domestic product gdp is still well short of the international average. Some countries aim to increase the taxtogdp ratio by a certain percentage. Tbilisi, georgia, where reform helped broaden the tax base. In this article, we look at the ethiopian tax system, types of taxes in ethiopia applicable to everyone. Democratic republic of ethiopia, the following documents have been released and are included in this package. The statistic shows gross domestic product gdp in ethiopia from 1984 to 2018, with projections up until 2024. Ethiopia is one of the fastest developing countries situated in the northeastern corner of africa. Tax reforms are under way to boost revenue mobilization, but deficit financing through central bank advances has. Addis ababa, ethiopia 12 october 2017 revenue mobilisation in africa continues to improve, says new report. Accordingly, the material deals with the following.
Lessons for tax reform what does georgias experience teach us about. This is due to tax non compliant behavior of tax payers and inefficiency of the tax authority. This page provides ethiopia government debt to gdp actual values, historical data, forecast, chart, statistics, economic calendar and news. The taxtogdp ratio is the total amount of taxes collected by a government divided by the countrys gdp. Tax revenue in ethiopia has been low throughout the study period 1974 to 2010. According to undp 2014 half of ssa countries rose 16. The average tax togdp ratio for the 16 countries covered in this second edition of the report was 19. Pdf estimating tax buoyancy and stability in ethiopia. With agricultural recovery, gross domestic product gdp growth rebounded in fy2017. Some countries like sweden have a high taxtogdp ratio as high as 54 percent.
This statistic shows the share of economic sectors in the gross domestic product gdp in ethiopia from 2008 to 2018. Chapter one introduces students to the basic concepts, principles and underlying assumptions of the many tax laws of ethiopia at present. Ethiopia introduced vat as a replacement to sales tax in the year 2003. However, the external current account deficit, estimated at 10. Schedule a employment income per month tax rate in % deduction in birr over birr to. 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.
Browse additional economic indicators and data sets, selected by global finance editors, to learn more about ethiopia. Accordingly, this teaching material tries to address, even though briefly, the basic component of tax law, especially in ethiopia. History of the postwar ethiopian fiscal system africa portal. Tax revenue current lcu taxes on income, profits and capital gains current lcu customs and. The national bank of ethiopia nbe with a view of maintaining inflation at low and single. Ethiopia taxgdp ratio stands at 11% by groum abate. Ethiopia has recorded annual average gdp growth of about ten percent in the last decade, driven by public investments in agriculture and infrastructure. When tax revenues grow at a slower rate than the gdp of a country, the taxtogdp ratio falls. 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. This payment is usually a small percentage of a total earning, made to assist the government in offsetting its. Global finance magazine ethiopia gdp and economic data. Tax revenue to gdp ratio is very low in ethiopia as compared to some of sub saharan african countries. Pdf employment income tax in ethiopia amanuel tsegaye. Fiscal consolidation has ensured low and stable fiscal deficits, despite a low taxgdp ratio, averaging 11% during 201619.
Analysis of tax buoyancy and its determinants in ethiopia. International monetary fund, government finance statistics yearbook and data files, and world bank and oecd gdp estimates. Tax revenue % of gdp international monetary fund, government finance statistics yearbook and data files, and world bank and oecd gdp estimates. Total tax revenue as a percentage of gdp indicates the share of a countrys output that is collected by the. Ethiopia government debt to gdp 19912019 data 2020. Determinants of tax revenue in ethiopia johansen co. The low tax gdp ratio, however, indicates the existence of modest tax burden and.
Performance and prospects of tax collection in ethiopia undp. Determinants of tax revenue in ethiopia united nations economic. The target population for this study consisted of the quarterly reports on the state. Although the economy has been growing at a remarkable rate averaging more than 10 percent, the slow. The average taxtogdp ratio for the 16 countries covered in this second edition of the report was 19. Table 1 2019 ethiopia recent developments november and. 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. 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. Addis ababa, ethiopia 12 october 2017 african union.
Tax is a compulsory payment made by an individual or a corporate establishment legal entity to the government. List of countries by tax revenue to gdp ratio wikipedia. 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. By 2008, georgias taxrevenuetogdp ratio had doubled to 25 percent.
The taxtogdp ratio is the ratio of tax collected compared to national gross domestic product gdp. 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. 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. Graph and download economic data for gross national income for ethiopia mktgnieta646nwdb from 1981 to 2018 about ethiopia and gni. As a percentage of gdp it was below the average sub saharan african countries. Tax revenue to gdp ratio is very low in ethiopia as compared to some of subsaharan african countries. Therefore, there is an immediate need for advancing tax reforms and improve capacity and quality of tax administration. 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.
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