Miscellaneous Knowledge Notes

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Disaggregated Survey Data on Taxation to Improve Policy Design: A Perspective from the Ethiopia Socioeconomic Survey (2018/19)

(World Bank, Washington, DC, 2021-06) Ambel, Alemayehu A. ; Komatsu, Hitomi ; Koolwal, Gayatri ; Tsegay, Asmelash H. ; Yonis, Manex B.

A disaggregated analysis of the tax burdens and economic needs of the most economically vulnerable - such as poor women and men, informal workers, and owners of micro- and small enterprises - is crucial for designing equitable and well-targeted tax and public spending policies. This is particularly important in low-income countries, where formal and informal tax systems often exist in parallel, and administrative data is sparse. Availability of data on tax payments by households and non-farm enterprises, individual-level employment and asset ownership, and contributions to community institutions and infrastructure programs can reveal important distributional implications for tax policy design going forward. This survey brief summarizes findings from the tax module of the nationally representative 2018-19 Ethiopia socioeconomic survey (ESS). The tax module covers different types of formal and informal taxes that households, businesses, and individuals pay, as well as informal contributions towards services and infrastructural improvements in the community. Findings from the multi-topic survey also reveal different tax burdens by socioeconomic and demographic groups, as well as across rural and urban areas, that are important for national tax policy design and targeting.
Gender Implications of Rural Land Use Fee and Agricultural Income Tax in Ethiopia

(World Bank, Washington, DC, 2021-06) Komatsu, Hitomi ; Ambel, Alemayehu A. ; Koolwal, Gayatri ; Yonis, Manex Bule

Land use fees and agricultural income tax in Ethiopia are levied on rural landholders according to the size of agricultural landholdings. Summarizing the evidence presented in the authors paper based on new, nationally-representative data on taxation of households and individual landholdings and rights in the Fourth Ethiopian Socioeconomic Survey, this brief discusses how area-based land taxes are regressive and the tax burdens for female-only households are larger than for dual-adult households. Social norms limiting women’s roles in agriculture and a gender agricultural productivity gap are likely to be a source of this gender bias. Lower tax rates for smallholders can reduce women’s tax burdens, but area-based land taxation would continue to be regressive.
Financial Inclusion in Ethiopia: Key Findings from the Ethiopia Socioeconomic Survey 2018/19

(World Bank, Washington, DC, 2021-06) Achew, Mengistu Bessir ; Ambel, Alemayehu A. ; Gradstein, Helen L. ; Tsegay, Asmelash Haile ; Ul Haq, Imtiaz ; Varghese, Minita M. ; Yonis, Manex Bule

Integrating a financial inclusion module into a multitopic household survey like the Ethiopia Socioeconomic Survey (ESS) makes it possible to explore how different community spatial, demographic, and socioeconomic characteristics affect the financial decisions of individuals and households. In addition, the survey data underpins financial inclusion policymaking and measurement, an agenda spearheaded by the National Bank of Ethiopia through the National Financial Inclusion Strategy (NFIS) efforts. The survey collected information from households and individuals on several financial matters including current levels of access to finance based on the prevalence of account ownership, use of financial services, types of institutions used, and their proximity to the household; household and individual financial decisions about savings, credit, insurance, and payments; and financial behavior, knowledge, and attitudes. The data provides a rigorous, multidimensional picture of where the country stands in expanding access to formal financial services and reaching the NFIS goals. This brief summarizes the ESS Financial Inclusion survey report, emphasizing on key findings on account ownership, gender gap, financial behavior and knowledge of financial institutions and products.