E-tax System Adoption and Tax Compliance in Ethiopia: Large and Medium Taxpayers’ Experience

This study assesses the trend in adopting e-filing by medium and large taxpayers, and the role of e-filing in improving tax compliance in Ethiopia. As they increase convenience and flexibility for taxpayers and reduce their compliance costs, e-filing and e-payment technologies were introduced in the tax administration to improve tax compliance and boost revenue collection. Specifically, it is widely believed that the innovations could save taxpayers time preparing and returning taxes and paying liabilities. They also could reduce errors and opportunities for corruption. However, there is no evidence of how effectively taxpayers use the technologies. Our study fills this gap by examining the trend adoption rate of e-filing and the correlation between e-filing adoption and tax compliance of large and medium taxpayers. More broadly, we briefly examine and summarise the current state of e-payment practices in Ethiopia. Summary of ICTD Working Paper 180.