Ethiopia needs rigorous tax measures to encourage taxpayers and investors, according to Tesfaye Mergia, head of the Ministry of Revenue’s Tax and Custom Training Center. In an interview with The Ethiopian Herald, Tesfaye emphasized the importance of a convenient tax system to foster investment and economic growth. He highlighted recent improvements, including amendments to the Income Tax Act and Excise Tax Act, with a Value Added Tax amendment forthcoming. Despite these efforts, Ethiopia’s tax-to-GDP ratio has declined, partly due to low tax contributions from the agriculture sector and capacity issues in tax administration. Tesfaye underscored the need for effective tax revenue utilization to enhance infrastructure and incentivize key economic sectors through targeted tax incentives.
