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E-Tax Rollout in Ethiopia—A Challenging Road to Renaissance

The adoption of electronic sales registration machines (ESRMs), had a positive impact on tax revenues which, as mentioned above, increased by 12% for income tax and 48% for VAT. It was demonstrated that the increase in tax collection was due to improved compliance rather than an increase in business activity.

In Ethiopia, the use of electronic tax systems has significantly reduced tax evasion and has increased the average amount of VAT paid by businesses. The use of electronic tax systems like ESRMs also facilitated the detection of non-compliance for both VAT and profits tax.

Source: bloombergtax.com

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