Presumptive Tax on Small and
            Microenterprises with a Gender Lens in Ethiopia

doi:10.1596/1813-9450-10707

Publication:
Presumptive Tax on Small and Microenterprises with a Gender Lens in Ethiopia

dc.contributor.author	Komatsu, Hitomi
dc.date.accessioned	2024-02-26T15:39:05Z
dc.date.available	2024-02-26T15:39:05Z
dc.date.issued	2024-02-20
dc.description.abstract	Governments often use simplified business tax systems, such as presumptive tax regimes, to register and tax small and microenterprises. Despite concerns about how such regimes could disproportionately affect female-owned and low-revenue entrepreneurs, there is a lack of empirical analysis examining the tax burden. The presumptive tax in Ethiopia has a complex assessment system, where the tax liabilities are determined according to the activity type and turnover (99 activities and 19 turnover bands), and some activities do not have a tax-free threshold. This paper uses two rounds of data in the Ethiopian Socioeconomic Surveys and the tax code to analyze the equity and gender implications of the presumptive tax on small and microenterprises by imputing the effective tax rates. There are three key findings. First, the effective tax rates are higher for businesses in the lowest quartile at 4.3 percent of turnover compared to 1.5 percent for businesses in the highest quartile, using the most recent survey, resulting in a regressive system. Second, male-owned businesses tend to operate in sectors without a tax-free threshold and are more likely than female-owned businesses to face higher tax rates. Third, the effective tax rates are high for businesses in food and beverage services, which is female-dominated, and for transit services, which is male-dominated, due to the lack of a tax-free threshold for these sectors. The study finds that an alternative presumptive tax system with a single tax rate on turnover and an exemption for all low-revenue businesses would be simpler for tax assessment and more progressive.	en
dc.identifier	http://documents.worldbank.org/curated/en/099610502202466295/IDU1a10001d614c4e1487c188fd1577ebc8aadf7
dc.identifier.doi	10.1596/1813-9450-10707
dc.identifier.uri	https://hdl.handle.net/10986/41105
dc.language	English
dc.publisher	Washington, DC: World Bank
dc.relation.ispartofseries	Policy Research Working Paper; 10707
dc.rights.holder	World Bank
dc.subject	FEMALE ENTREPRENEURS
dc.subject	FISCAL POLICY
dc.subject	TAX
dc.subject	MICROENTERPRISES
dc.subject	EFFECTIVE TAX RATE
dc.title	Presumptive Tax on Small and Microenterprises with a Gender Lens in Ethiopia	en
dspace.entity.type	Publication
okr.associatedcontent	https://reproducibility.worldbank.org/index.php/catalog/91 Link to data and reproducibility package
okr.crossref.title	Presumptive Tax on Small and Microenterprises with a Gender Lens in Ethiopia
okr.date.disclosure	2024-02-20
okr.date.lastmodified	2024-02-20T00:00:00Z	en
okr.doctype	Policy Research Working Paper
okr.doctype	Publications & Research
okr.docurl	http://documents.worldbank.org/curated/en/099610502202466295/IDU1a10001d614c4e1487c188fd1577ebc8aadf7
okr.guid	099610502202466295
okr.identifier.docmid	IDU-a10001d6-4c4e-487c-88fd-577ebc8aadf7
okr.identifier.doi	10.1596/1813-9450-10707
okr.identifier.doi	https://doi.org/10.1596/1813-9450-10707
okr.identifier.externaldocumentum	34261590
okr.identifier.internaldocumentum	34261590
okr.identifier.report	WPS10707
okr.import.id	3244
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/099610502202466295/pdf/IDU1a10001d614c4e1487c188fd1577ebc8aadf7.pdf	en
okr.region.administrative	Africa Eastern and Southern (AFE)
okr.region.country	Ethiopia
okr.sector	Central Government (Central Agencies)
okr.theme	Public Expenditure Management,Demographics and Aging,Gender,Human Development and Gender,Data Development and Capacity Building,Economic Policy,Public Finance Management,Fiscal Policy,Domestic Revenue Administration,Public Sector Management,Data production, accessibility and use,Tax policy,Public Expenditure Policy
okr.topic	Gender::Gender and Economics
okr.topic	Macroeconomics and Economic Growth::Taxation & Subsidies
okr.unit	Living Standards Measurement (DECLS)
okr.unit	Development Data Group (DECDG)
relation.isSeriesOfPublication	26e071dc-b0bf-409c-b982-df2970295c87
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