Economists studying tax system in Ethiopia

Grant allows Profs. Ali and Shifa to study impact of technology on taxation systems

Merima Ali and Abdulaziz Shifa, both assistant professors of economics at the Maxwell School, are studying the effects that technology upgrades have on the Ethiopian tax system, funded by a recent grant from the International Center for Tax and Development. The $110,000 grant was awarded to Ali and Shifa in collaboration with the Chr. Michelsen Institute of Norway; the Syracuse University-administered component is budgeted for $46,470. With those funds, Ali and Shifa will analyze the recent proliferation of electronic sales register machines (ESRMs) in Ethiopia and how they affect tax payment and avoidance amongst Ethiopian business owners.

Typically, the taxation infrastructure in developing nations such as Ethiopia lags behind modern standards — one of the barriers such nations face in financing state-run activities. Tax systems that lack in capacity allow many citizens and businesses to underpay their taxes or avoid payment altogether. However, in recent years, taxation agencies have begun to modernize by developing Electronic Taxation Systems, in the form of ESRMs and other technologies;  Ethiopian officials adopted this technology in 2008. With this grant, Ali and Shifa will study the implementation of ESRMs in Ethiopia, specifically in how they mitigate tax avoidance, their effect on other taxes, and if they help the government control over-taxation by the government.

Merima Ali teaches The World Economy at the Maxwell School. Her research interests lie in development, taxation, and microeconomic analysis of small-scale industries. She received a PhD in development economics from the Wageningen School of Social Science in the Netherlands. Abdulaziz Shifa’s research interests lie in political economics, economic growth, and development. He received a PhD from the Institute for International Economic Studies at Stockholm University in Sweden. 10/26/15