Comparative Analysis of Government Revenue and Expenditures In The Case of the Federal Government of Ethiopia

Abstract

In civilized societies taxation is one of the oldest activities, which has been playing a key role for thousands of years. Public expenditure in developing countries like Ethiopia plays an important role in the process of economic development. The general objective of the study was to make a Comparative analysis of government tax revenue and expenditure budget of the federal government of Ethiopia. To conduct the study both primary and secondary data were used. Primary data were collected from the ministry of finance and economic cooperation and the tax authority using questionnaire and interviews. The collected data were analyzed using SPSS 21 version. The findings show that the tax authority has limitations in using technologies to modernize the tax administration, poor the tax collection capacity. The Tax to GDP ratio of the country is low as compared to the sub-Saharan countries. There are different factors for the poor tax collection performance; weak enforcement and low tax audit coverage, and lack of strong cooperation with stakeholders. The government has weaknesses in the management public resources. The tax authority should use different Medias to create taxpayers awareness about tax, should strengthen its tax enforcement department to bring non taxpayers to the tax net.