The main determinants of VAT revenue productivity in Ethiopia. A research

Table of Contents

1. Introduction

1.1. Background of the Study

1.2. Statement of the Problem

1.3. Objective of the Study

1.3.1. General objective

1.3.2. Specific objectives

1.4. Research Questions

1.5. Significance of the Study

1.6. Scope of the Study

1.7. Limitations of the Study

2. Literature Review

2.1. Theoretical Literatures

2.2. Empirical Literature

3. Research Methodology and Model specification

3.1. Research Method of Analysis

3.2. Data Collection and Source

3.3. Model Specification

3.3.1. Unit Root Test

3.3.2. Estimation procedure

4. Data Presentation and Analysis

4.1. Descriptive Analysis

4.1.1. VAT revenue collection productivity in Ethiopia over (2003-2016)

4.1.2. Corruption in Ethiopia over (2003-2016)

4.1.3. Economic growth in Ethiopia over (2003-2016)

4.1.4. Gross VAT collection in Ethiopia over (2003-2016)

4.1.5. Import expenditure of Ethiopia over (1977-2016)

4.1.6. Inflation in Ethiopia over (2003-2016)

4.1.7. Population in Ethiopia over (1960-2016)

4.1.8. Total consumption expenditure in Ethiopia over (2003-2016)

4.2. Econometric Analysis

4.2.1. Test analysis

4.2.2. Estimation procedure

4.2.3. Stability of the model and coefficients

5. Summary, Conclusion and Recommendation

5.1. Summary

5.2. Conclusion

5.3. Recommendations

Research Objective and Focus

The primary objective of this study is to investigate the determinants of VAT revenue productivity in Ethiopia from 2003 to 2016, utilizing quantitative research methods and an Autoregressive Distributed Lag (ARDL) model to assess long-run effects and policy implications for revenue efficiency.

• Analysis of VAT efficiency trends in Ethiopia over the specified period.
• Evaluation of macroeconomic determinants including GDP per capita, inflation, and import expenditures.
• Impact assessment of governance factors such as the Corruption Perception Index.
• Estimation of long-run relationship between VAT productivity and demographic changes.

Excerpt from the Book

Chapter Summaries

1. Introduction: This chapter provides an overview of Value Added Tax concepts, identifies the specific research problems regarding VAT efficiency in Ethiopia, and outlines the objectives and significance of the study.

2. Literature Review: This section covers theoretical frameworks of consumption taxes and VAT, alongside a review of empirical studies regarding VAT performance and determinants in various national contexts.

3. Research Methodology and Model specification: This chapter explains the quantitative research design, data sources, and the mathematical specification of the Autoregressive Distributed Lag (ARDL) model used for the empirical analysis.

4. Data Presentation and Analysis: This chapter details the descriptive statistics of the variables and presents the results of the econometric estimations, including unit root tests and the final regression analysis.

5. Summary, Conclusion and Recommendation: The final chapter synthesizes the main findings, concludes on the impact of various economic determinants on VAT productivity, and provides policy recommendations for the Ethiopian tax authorities.

Keywords

Value Added Tax, VAT Productivity, C-Efficiency Ratio, Ethiopia, Autoregressive Distributed Lag (ARDL), Economic Growth, Inflation, Import Expenditure, Corruption Perception Index, Tax Revenue, Tax Administration, Macroeconomic Determinants, Time Series Analysis, Tax Compliance, Revenue Performance.

Frequently Asked Questions

What is the primary focus of this research?

The research focuses on investigating the determinants of VAT revenue productivity in Ethiopia at the macro level during the period from 2003 to 2016.

What are the central thematic areas of the study?

The study examines VAT efficiency, macroeconomic indicators like GDP growth and inflation, and the impact of corruption and demographic factors on tax collection performance.

What is the core objective of the research?

The objective is to identify and analyze the major determinants that affect VAT revenue productivity to provide an analytical framework for policymakers.

Which scientific methodology is employed in the work?

The researcher uses a quantitative research design and an Autoregressive Distributed Lag (ARDL) model to perform time series analysis on secondary data.

What topics are covered in the main section of the paper?

The main sections cover theoretical and empirical literature, detailed methodology, descriptive analysis of economic data, and econometric regression results.

Which keywords best characterize the study?

Key terms include Value Added Tax, VAT Productivity, C-Efficiency Ratio, Ethiopia, ARDL model, and macroeconomic determinants.

How does the Ethiopian VAT productivity compare internationally?

The study concludes that Ethiopia's VAT productivity is relatively low, averaging 18%, which is below the averages observed in many other regions, including other parts of Sub-Saharan Africa.

What impact does corruption have on VAT revenue?

The research finds a negative and statistically significant relationship between corruption and VAT productivity, suggesting that higher levels of corruption correlate with lower revenue efficiency.

How does import expenditure affect VAT performance in the model?

The analysis indicates that import expenditure has a negative effect on VAT productivity, as price volatility and external factors in the world market complicate tax collection.