Biblio

The Contribution and Trends of Tariff Revenue in the Ethiopian Tax Structure

TitleThe Contribution and Trends of Tariff Revenue in the Ethiopian Tax Structure
Publication TypeJournal Article
Year of Publication2014
AuthorsGudissa, L, Mishra, DK
JournalJournal of Economics and Sustainable Development
Volume5
ISSN2222-1700
Keywordsforeign trade taxes, government revenue, revenue productivity, tariff revenue
Abstract

Revenue collection from internationally traded goods is one of the core roles of Customs Administrations in
many developing countries. Currently, the Ethiopian Revenues and Customs Authority (ERCA), the only
government department authorized in the country to collect taxes from foreign trade, is also collecting customs
duties, excise tax, value added tax (VAT), surtax, and withholding tax from imported goods to the country.
These taxes provide considerable revenue to the government. The central theme of this Article is to evaluate the
performance of customs duty towards its contribution to total government revenues. To achieve this objective,
two important measurements of a tax revenue performance, the ratio of the tariff revenue to the total government
revenues and the revenue productivity of the tax base in the study period (1959/60-2012/13), are analyzed first.
Then, both the share and the trend of customs duty in the trade taxes, total taxes and total government revenues
are analyzed, respectively. The trend of customs duty/GDP ratio is also included in the analyses. The findings of
the analyses indicated that although its share in the government budget is significant, the effective tariff rate is
much lower than the average tariff rate; its contributions to both the total tax revenues and total government
revenues have also declined over time. Therefore, the identification of the responsible factors for this low
performance of the tariff revenue in the country needs further investigations.

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