Ethiopia—Tax, Audit, and Transparency Programme (TAUT)

Though Ethiopia has achieved dramatic increases in economic growth and some successes in reducing poverty rates, the country’s challenges remain substantial; gross domestic product (GDP) per capita continues to be one of the lowest in the world, revenue collection lags behind growth rates, and incentives for private-sector growth are limited. Public-sector reform is challenging and the goals of the National Growth and Transformation Plan are ambitious. Success is only possible when reform is closely adapted to the local political and economic context, is well sequenced, and is Ethiopian-led.

The Tax, Audit, and Transparency Programme (TAUT) supported the Government of Ethiopia in progressively expanding the tax base and ensuring more effective tax administration. TAUT improved the business climate and public oversight and transparency across specific government agencies and the wider public sector.

TAUT monitored evidence that key agencies expanded their reach and improved their effectiveness, ensuring improved revenue mobilization and more transparent and accountable services to Ethiopians.

Sample Activities

• Conduct comprehensive tax legislation and policy assessment.
• Advise the Ethiopian Customs and Revenue Authority (ERCA) and other government partners in developing the country’s National Tax Roadmap.
• Partner with ERCA to upgrade Ethiopia’s Standard Integrated Government Tax Administration System (SIGTAS) and reduce reliance on time-consuming and unreliable paper record keeping.
• Improve audit capability and public oversight by working with the Office of the Federal Auditor General and regional counterparts to strengthen institutional systems and processes and increase efficiency.
• Promote involvement of civil society in transparency and anti-corruption efforts, including building the capacity of investigative journalists to report misuse of public funds.

Select Results

• Upgraded electronic tax-filing system, resulting in a 250 percent increase in the number of value-added tax filers and leading to shorter wait times in tax offices while also reducing time burden on tax officials.
• Supported the Federal Ethics and Anti-Corruption Commission to institutionalise anti-corruption efforts across public agencies by developing educational modules on ethics and corruption prevention and delivering training to more than 800 national and local government officials.
• Supported more transparent government auditing processes through the implementation of improved IT systems and audit training, with the intention of increasing private-sector confidence in government contracting and encouraging further business investment in the country.
• Signed concept note with the Commercial Bank of Ethiopia and regional IT partner USI to begin development of an e-payment solution that will interface directly with SIGTAS electronic tax filing records and allow for convenient and direct payment of taxes, reducing taxpayer travel time and opportunities for corruption.