This ICTD Research in Brief is a two-page summary of ICTD Working Paper 48 by Giulia Mascagni and Andualem Mengistu. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time.
This paper looks at the challenge faced by many low income countries of increasing tax revenue dramatically while minimising distortions in the economy that may discourage investment and, more generally, economic growth. In this context, corporations have to contribute to the public purse but their tax burden should still allow them to prosper. Despite the importance of this topic, very little evidence is available so far on the corporate tax burden in many low-income countries, including Ethiopia. This paper fills this gap by calculating and analysing effective tax rates (ETRs) across Ethiopian corporations.
