How the data and technology revolution can transform tax capacity in Ethiopia
Ethiopia faces mounting fiscal pressures and a shifting aid landscape, necessitating a stronger tax system to support its economic transformation. This policy brief provides recommendations for Ethiopia's tax system, including leveraging global best practices, data analytics, targeted incentives, and technology to modernise tax administration and enhance revenue collection.
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Mittra-et-al-Policy-Brief-May-2025.pdf
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- Ethiopia is at a crossroads. With internal fiscal pressures and a changing aid environment, the country needs to increase its tax capacity to fund its economic transformation.
- This policy brief presents an approach for increasing Ethiopia’s tax capacity, drawing on global experiences from Nepal, Tanzania, Senegal, and other countries.
- The brief outlines challenges and opportunities for modernising the nation’s tax system. Key recommendations centre on the effective use of tax data and analytical tools, targeted incentive schemes, and the innovative use of technology to sustainably boost revenue mobilisation.
- The brief provides practical applications for how data and technology can improve enforcement and compliance in VAT, customs, and income tax, and details the role of research in evidence-based policy design.