Opinion - Whoever is in charge of the Ethiopian economy will have to work under strict budgetary constraints. In most years, the budget deficit amounts to less than two percent of the GDP. Even as the economy expanded, government revenue remained relatively constant at around 10 percent of the GDP. While such difficulties are not uncommon, the effects of the war in northern Ethiopia and the coronavirus pandemic-driven global economic slowdown on government revenue over the past two years have made them rather differ
Whoever is in charge of the Ethiopian economy will have to work under strict budgetary constraints. In most years, the budget deficit amounts to less than two percent of the GDP. Even as the economy expanded, government revenue remained relatively constant at around 10 percent of the GDP.
- Advertisement -"For the coming fiscal year, we planned the revenue taking into account the introduction of the property tax, the updated excise tax, and the value-added tax," Ahmed stated in his address to the Parliament. Revenue forecasts for the fiscal year totaled 477.8 billion birr, with taxes expected to bring in 400 billion birr of that total. Revenue versus the planned budget of 786.6 billion birr caused the deficit to soar to a record 309 billion birr.
Wasihun elaborated on how the new proclamation will put an end to the practice of various businesses receiving VAT exemption rights over the past two decades. The inclusion of financial institutions in the list of VAT-paying firms is one of the most significant changes made by the proclamation.
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