E-tax System Adoption and Tax Compliance in Ethiopia: Large and Medium Taxpayers’ Experience
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Research in Brief 126
This study assesses the trend in adopting e-filing by medium and large taxpayers, and the role of e-filing in improving tax compliance in Ethiopia. As they increase convenience and flexibility for taxpayers and reduce their compliance costs, e-filing and e-payment technologies were introduced in the tax administration to improve tax compliance and boost revenue collection. Specifically, it is widely believed that the innovations could save taxpayers time preparing and returning taxes and paying liabilities. They also could reduce errors and opportunities for corruption. However, there is no evidence of how effectively taxpayers use the technologies. Our study fills this gap by examining the trend adoption rate of e-filing and the correlation between e-filing adoption and tax compliance of large and medium taxpayers. More broadly, we briefly examine and summarise the current state of e-payment practices in Ethiopia. Summary of ICTD Working Paper 180.
Seid Yimam is based at the Institute of Development Studies, working as a Research Associate focusing on tax administration, gender and tax compliance, informal tax, and environmental taxes. He is also a PhD student in Economics at the University of Sussex on a scholarship funded by ICTD. Outside of the field of taxation, his main research areas are in contemporary development focusing on Agriculture and Food Systems Transformation. He holds an MSc in Economics (Policy Analysis) from Addis Ababa University and an MSc in Economics from the University of Copenhagen. He worked as a Research Officer at the International Food Policy Institute (IFPRI) and the Policy Study Institute (PSI), and he was also a lecturer of Economics at Debre Berehan University in Ethiopia prior to joining ICTD.
Kebede Lidetu Shai is currently an independent consultant working as a risk and compliance advisor for the Malawi Revenue Authority as part of a project funded by the World Bank. He served the Ethiopian Ministry of Revenue for 18 years as Director of Risk and Compliance Strategy and at various levels. He also worked as an external technical expert for the International Monetary Fund (IMF) in 7 different countries in Africa and the Caribbean since 2012. He worked as Manager of Compliance at Amhara Bank S.C. for one year. He has been also providing training and consulting services to government organizations in the areas of risk management, policy and strategy development, enterprise risk management and information technology consulting since 2012.
Tihtina Belete is an instructor at the Ethiopian Civil Service University in the Tax and Customs department. Previously, she worked in the Ethiopian Ministry of Revenues as a Tax Compliance Team Leader and within the Tax Transformation Office as Tax Debt Priority Area Coordinator. She also worked with the Ethiopian Customs Authority in several positions over 12 years, namely Customs Intelligence, Risk Management Officer, and Risk Management Senior Officer.
Citation: Yimam, S.; Lidetu, K. and Belete, T. (2024) E-tax System Adoption and Tax Compliance in Ethiopia: Large and Medium Taxpayers’ Experience, ICTD Research in Brief 126, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.067
