13 Social Impact of a Tax Reform: The Case of Ethiopia
Author:
Sònia Muñoz https://isni.org/isni/0000000404811396 International Monetary Fund

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Abstract

Ethiopia is one of the poorest countries in the world, with a per capita gross national income of less than one-fourth of the sub-Saharan average.1 It also has some of the poorest human development indicators in the world2 with a national poverty level at about 44 percent and more than 80 percent of the population living on less than U.S.$1 a day. It has experienced a war with neighboring Eritrea ending in 2000, as well as frequent natural disasters that have ravaged many parts of the country and hampered development plans. The economy of Ethiopia is very agrarian, focusing mainly on the production and export of commodities such as coffee. Consequently, the country is particularly vulnerable to drought and the adverse effects of fluctuations in the commodity prices.

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The Role of Fiscal Policy
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