Halefom, Awet (2011) Challenges of Enforcing Value Added Tax Law in Ethiopia. Masters thesis, Addis Ababa University.
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Abstract
The spread of value added tax around the world is unmatched by that of any other tax in modern times. The expansion particularly with the least developed countries indicates a heavy reliance on the hope that this form of tax will solve the problem of raising revenue while fostering growth in the context of a highly competitive global economy. The most potential gains linked with the adoption of VAT are revenue and ease of enforcement. Ethiopia, as part of this expansion, came with this type of tax in 2002 which has rescinded and replaced the sales and excise tax proclamation No 68/1993 (as amended). Even if enforcement problem is not a new fangled problem for developing countries, the policy alternative of value added tax in exemptions, rates and thresholds in the one hand and the stakeholders which include the enforcing body, the taxpayers and consumers on the other hand have their own impact on enforcement. The Ethiopian value added tax opts single rate, some exemptions and a threshold of 500,000 from other alternatives. These alternatives are also in one or another way influence the compliance by the taxpayers and other stakeholders. This paper finds that comparing to the African and OECD member countries the Ethiopian value added tax seems well towards the enforcement which has fifteen percent rate, limited exemptions and high threshold which is 500,000. However, the means of accommodation those businesses below the threshold; the limited capacity and the problems related to estimation and registration of the enforcing body and lack of awareness, sales register machine problems and fraudulent act of taxpayers are the challenges entangled with the enforcement of value added tax in Ethiopia.
| Item Type: | Thesis (Masters) |
|---|---|
| Subjects: | H Social Sciences > HG Finance K Law > K Law (General) |
| Divisions: | Africana |
| Depositing User: | Tim Khabala |
| Date Deposited: | 24 May 2018 14:07 |
| Last Modified: | 24 May 2018 14:07 |
| URI: | http://thesisbank.jhia.ac.ke/id/eprint/4048 |
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