Determinants Of Tax Revenue In Ethiopia

The focus of paper is to identify determinants of tax revenue in Ethiopia by using a secondaryrndata and multiple variables regression model. The objective of the study was to identifyrndeterminants of tax revenue such sectors of economy like agriculture, industry and service, FDI,rninflation rate, interest rate, per capita income and trade openness. A study is important tornidentify significant variables affecting tax revenue. The research approach adopted in this thesisrnincludes series data set that consists of fifteen years. The time period covered was 1999/00 torn2013/14; this is primarily due to unavailability of organized data before the indicated period.rnBoth descriptive statistics and econometric tools were employed to analyze and presentrnthe obtained data. The findings from this research provide evidence that, foreign directrninvestment to GDP percentage regression result shows negative significant, Industry sector inrnpercentage of GDP positive and significant, Inflation negative but not significant, Per capitarnincome has the positive sign which is significant, and saving interest rate have positiverninsignificant impact on tax revenue. The main conclusions drawn from this study are, foreignrndirect investment to GDP, Industry sector in percentage of GDP and Per capita income havernsignificant impact on tax revenue. This paper recommends that inflation rate and saving interestrnrate are in significant variables affecting tax revenue.rnKey words: Tax, Determinant of tax revenue, time series, Ethiopia

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