Improving tax policy and administration and tax policy-making in Ethiopia

Researchers from the Centre for Tax Analysis in Developing Countries (TAXDEV) at the Institute for Fiscal Studies (IFS) are collaborating with the recently established Tax Policy Directorate (TPD) of the Ministry of Finance and Economic Cooperation (MOFEC) of the Federal Democratic Republic of Ethiopia on tax policy and administration analysis and capacity building.  The collaboration is funded by the Department for International Development as part of the IFS TAXDEV initiative.

On Tuesday the 1st August 2017, TAXDEV and the TPD co-organised a one-day workshop with over 40 key stakeholders, including senior officials from the Ethiopian Revenue and Customs Authority (ERCA) and regional tax revenue authorities, to discuss challenges with Value Added Tax (VAT) and Turnover Tax (TOT) policy and administration in Ethiopia. TAXDEV researchers discussed the main principles that should guide the design and administration of a good tax system - and VAT and TOT in particular - as well as relevant international experience around VAT and TOT policy and administration issues. The workshop was fruitful in facilitating and strengthening the collaboration between the TPD, ERCA and other stakeholders. The importance of using high quality administrative and survey data to formulate evidence-based policy options in this tax area was emphasised. The workshop provided a forum for participants to agree on a range of policy and administration challenges in the current VAT and TOT system that need further consideration, and to identify areas for further quantitative modelling.

Birhanu Tadesse (Head of the TPD), Dr. Laura Abramovsky (IFS), and India Keable-Elliott (IFS).

India Keable-Elliott (IFS) presenting at the TPD.

Researchers from the Centre for Tax Analysis in Developing Countries (TAXDEV) at the Institute for Fiscal Studies (IFS) and partners from the Tax Policy Directorate (TPD) of the Ethiopian Ministry of Finance and Economic Cooperation (MOFEC).