Social Impact of a Tax Reform: The Case of Ethiopia
November 1, 2003
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Summary
This paper provides an assessment of the poverty and social impact of replacing Ethiopia's sales tax with a value-added tax (VAT). The results indicate that this reform has not had a major adverse effect on the poorest 40 percent of the population. The VAT is progressive in its incidence, and the higher revenues brought about by the VAT can provide additional funds for poverty-reducing spending, including primary education. At the same time, there is significant scope for making education spending more pro-poor by increasing the access of low-income households to schools.
Subject: Education, Expenditure, Health care spending, Revenue administration, Tax incidence, Tax policy, Taxes, Value-added tax
Keywords: expenditure policy, Health care spending, Incidence Analysis, incidence of the VAT, introduced VAT, Poverty, Poverty-Related Expenditure, public expenditure, revenue collection, sales tax, Sub-Saharan Africa, tax, tax incidence, Tax incidence, Value-Added Tax, VAT, VAT amount, VAT proclamation, WP
Pages:
39
Volume:
2003
DOI:
Issue:
232
Series:
Working Paper No. 2003/232
Stock No:
WPIEA2322003
ISBN:
9781451875584
ISSN:
1018-5941
