TaxDev supports tax policy responses to COVID-19 in Ethiopia

Between March and June 2020, TaxDev researchers provided support to the Tax Policy Directorate (TPD) at the Ethiopian Ministry of Finance to identify potential fiscal policy responses to the COVID-19 crisis, and evaluate the pros and cons of these different options.

This support was delivered in two phases.

In the first phase, TaxDev collaborated with the TPD to generate evidence that explored the key economic considerations for Ethiopia during the COVID-19 crisis, and identified a set of potential tax policy options in line with the principles for Covid-19 related tax measures identified by IFS researchers, including measures to support business cash-flow and support with employment costs.

The second phase of support utilised policy costing and appraisal templates developed by TaxDev researchers to assess a set of tax policy reform options proposed by the TPD. The analysis considered the likely impact of different policies on various outcomes of interest, including tax revenues, economic activity, and tax administration and compliance. This work built on training delivered by TaxDev researchers on policy costing and appraisal methods, and aimed to further integrate these practices into the policy process within the Ministry of Finance