Social Impact of a Tax Reform: The Case of Ethiopia

Sònia Muñoz and Sang-Wook Cho ()

No 2003/232, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; VAT; sales tax; tax; Poverty; Incidence Analysis; Value-Added Tax; Poverty-Related Expenditure; introduced VAT; public expenditure; tax incidence; VAT proclamation; expenditure policy; incidence of the VAT; revenue collection; VAT amount; Health care spending; Tax incidence; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 39
Date: 2003-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=17018 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2003/232

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().