Determinants of Tax Revenue in Ethiopia
Economics
Volume 6, Issue 6, December 2017, Pages: 58-64
Received: Nov. 15, 2017; Accepted: Nov. 25, 2017; Published: Feb. 12, 2018
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Authors
Neway Gobachew, Department of Accounting and Finance, Jimma University, Jimma, Ethiopia
Kenenisa Lemie Debela, Department of Accounting and Finance, Jimma University, Jimma, Ethiopia
Woldemicael Shibiru, Department of Accounting and Finance, Jimma University, Jimma, Ethiopia
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Abstract
Fiscal deficit is the core issue of most of the developing countries over the past several decades. The reason behind the large increase in fiscal imbalance is the rapid expansion in expenditure and low revenue collection. Hence, efficient tax system is crucial for these countries. Since Ethiopian is one among developing countries, pattern of tax revenues and economic growth across country has become a significant concern. Due to aforementioned deficiencies, Ethiopia struggles with budget deficits for a long time. The focus of this paper is to identify determinants of tax revenue in Ethiopia by using a secondary data and multiple variables regression model using OLS method. Quantitative research method was employed on time series data set for the years 1999/00 to 2015/16. Both descriptive statistics and econometric tools were employed to analyze and present the data collected from concerned bodies. The finding reveals that, industry sector share to GDP, per capita income and trade openness as measured by share of export and import to GDP have significant positive effect on tax revenue whereas; agriculture sector share to GDP and annual rate of inflation have significant and negative effect on tax revenue as measured by share of tax revenue to GDP.
Keywords
Determinants, Ethiopia, Tax Revenue
To cite this article
Neway Gobachew, Kenenisa Lemie Debela, Woldemicael Shibiru, Determinants of Tax Revenue in Ethiopia, Economics. Vol. 6, No. 6, 2017, pp. 58-64. doi: 10.11648/j.eco.20170606.11
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Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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