In Ethiopia we are working with the recently-established Tax Policy Directorate at the Fiscal Policy Directorate of the Ministry of Finance and Economic Cooperation (MoFEC). Our partnership focuses around the analyses of key tax and benefit policy and administration issues, and the co-production of modelling tools. We have worked closely with MoFEC to establish research and policy priorities, map and source administrative and survey data, and assess and develop appropriate analytical tools.
We are currently conducting a comprehensive Value Added Tax (VAT) and Turnover Tax (ToT) study. The VAT/ToT legislation in Ethiopia has been in place and unreformed since 2002. MOFEC is interested in considering policy options to reform the VAT and ToT system with the aim of improving tax revenue, efficiency (both economic and administration) and business-friendliness, while considering equity and poverty effects.