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Public Finance
Public Finance
🔑 Answer: Public finance is the study of how governments use revenue and expenditure to influence the
economy and provide public goods and services.
🔑 Answer: Public finance plays a crucial role in Ethiopia by enabling the government to provide essential
public goods and services, such as healthcare, education, infrastructure, and social welfare. It also helps
to fund poverty reduction programs, promote economic growth, and minimize income inequality.
🔑 Answer: There are different types of taxes in Ethiopia, including income tax, value-added tax (VAT),
excise tax, customs duty, and mining royalty.
🔑 Answer: In Ethiopia, income tax is calculated based on a progressive tax system, which means that
individuals pay a higher percentage of tax on their income as they earn more. The tax rates range from
0% to 35%, depending on the income level.
🔑 Answer: VAT is a tax on the value-added at each stage of production and distribution of goods and
services. In Ethiopia, the standard VAT rate is 15%.
🔑 Answer: Excise tax is a tax on specific goods and services, such as alcohol, tobacco, and luxury items.
In Ethiopia, the excise tax rates vary depending on the type of product, ranging from 10% to 100% of the
value.
🔑 Answer: Customs duty is the tax charged on imported goods entering Ethiopia. The duty rates vary
depending on the type of goods and their value.