Practice, Opportunities, and Challenges of Electronic Tax System from Taxpayer’s Perspective: Evidence from Ethiopia

Tekalign Negash Kebede, Dereje Daniel Tona and Tamirat Ludego Fitamo

Journal of Tax Reform, 2025, vol. 11, issue 1, 6-24

Abstract: Taxation serves as a crucial financial foundation for economic and social development, yet inefficient systems can impede compliance and efficiency. In Ethiopia, the introduction of an e-tax system marks a transformative effort to digitize tax administration, allowing taxpayers to electronically file forms and make payments. This study aims to explore the dynamics of the e-tax system by examining its practices, challenges, and opportunities through the experiences of Ethiopian taxpayers. Utilizing a descriptive research design, we employed random sampling techniques to select the respondents. The study sample consisted of 269 taxpayers who pay their taxes in Hawassa revenue office which provides a comprehensive snapshot of taxpayer perceptions and behaviors. The results indicate a significant uptake of the e-tax system since its implementation in 2021, with many taxpayers recognizing its benefits, including reduced paperwork, lower transportation costs, minimized calculation errors, and shorter wait times. However, a notable portion of the taxpayer population remains disengaged, highlighting persistent barriers to adoption. Key challenges identified include inadequate internet connectivity, frequent power outages, server congestion, and language discrepancies, which undermine the system’s effectiveness. The discussion emphasizes the need for strategic improvements, advocating for enhanced collaboration among stakeholders and targeted investments in digital infrastructure and taxpayer education. By addressing these issues, Ethiopia can optimize the e-tax system, fostering greater compliance and enhancing the efficiency of tax administration. This study not only sheds light on the current landscape of taxpayer experiences but also offers actionable recommendations for policymakers aimed at refining and expanding the e-tax framework. By analysing taxpayer feedback and identifying specific pain points within the system, the study provides insights that can inform strategic interventions. For instance, enhancing digital infrastructure and addressing connectivity issues will be crucial in facilitating seamless access to the e-tax platform.

Keywords: electronic tax system; e-tax payment; e-tax-filling; digitize tax administration; Ethiopia (search for similar items in EconPapers)
JEL-codes: H10 H2 H83 K34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aiy:jnljtr:v:11:y:2025:i:1:p:6-24

DOI: 10.15826/jtr.2025.11.1.189

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