The analysis of value added tax (VAT) to increasing government revenue in Ethiopia

The analysis of value added tax (VAT) to increasing government revenue in Ethiopia

The value added tax is a significant source for increasing the revenue of the Government in Ethiopia. It is a family of indirect tax paid on the value added to goods and services by enterprises at each stage of the production and distribution process. The main objective of the study is to analyze the contribu-tion of VAT to increase the governments’ revenue and makes comparative analysis with other types of taxes. In order to drive the main objective of study the secondary source of data is being under persuasion. Most of the data are secondary by nature and collected through internet sources, newspa-pers, published and unpublished reports of the Government of Ethiopia etc. Furthermore, the study has to use simple descriptive statistical methods like table, percentage, and chart to analyze the data.  The significance of the study of VAT is the most important for regional and federal government of Ethiopia in order to minimize the gap between revenue generated and expenses occurred thereon. There are only few researches have been carried out on the same subject in the past and this study shall pertain to update literature helping to future research in respect to same concern. The scope of the study is lying down on emphasizing to identify the role of VAT as one of the best means to in increasing the revenue of Ethiopian Government. The study pertains to analyze various types of taxes had been introduced during 2005 to 2010 according to Ethiopian Calendar (EC) by the Federal Dem-ocratic Republic of Ethiopia.