Selected Issues Papers

Ethiopia’s Tax System: Structure, Performance, and Benchmarking

By Gabriel Hegab

July 30, 2025

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Format: Chicago

Gabriel Hegab. "Ethiopia’s Tax System: Structure, Performance, and Benchmarking", Selected Issues Papers 2025, 108 (2025), accessed July 31, 2025, https://doi.org/10.5089/9798229019255.018

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Summary

This Selected Issues Paper reviews Ethiopia’s tax system, highlighting its persistently low tax-to-GDP ratio despite sustained economic growth. It benchmarks Ethiopia’s revenue performance against regional and structural peers, examines the structure and efficiency of major tax categories, and analyzes revenue responsiveness to the business cycle. Using stochastic frontier analysis, it estimates the country’s tax potential and identifies significant gaps.

Subject: Consumption taxes, Corporate income tax, Fiscal policy, Income and capital gains taxes, Income tax systems, Personal income tax, Revenue administration, Revenue mobilization, Tax administration core functions, Taxes, Taxes on trade, Value-added tax

Keywords: Benchmarking, Consumption taxes, Corporate income tax, Ethiopia, Fiscal sustainability, Income and capital gains taxes, Income tax, Income tax systems, Personal income tax, Revenue mobilization, Revenue mobilization, Stochastic frontier analysis, Sub-Saharan Africa, Tax administration core functions, Tax collection, Tax efficiency, Tax policy, Tax potential, Taxes on trade, Trade tax, Value-added tax, Value-added tax

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