SMALL BUSINESS TAXATION IN ETHIOPIA: A FOCUS ON LEGAL AND PRACTICAL ISSUES IN INCOME TAX CATEGORY
SMALL BUSINESS TAXATION IN ETHIOPIA: A FOCUS ON LEGAL AND PRACTICAL ISSUES IN INCOME TAX CATEGORY

Summary/Abstract: The expenses, which are incurred by the government in carrying out its inherent duties, are covered by imposing tax to its citizens. Thus, a business, small or large, is obliged to contribute its share to cover the government expenses in the form of ‘tax’. This article analysis the legal and institutional framework of small business taxation in Ethiopia. It identifies and examines the types and mode of calculation of the different types of taxes imposed on small business entities; income tax, turn over tax and excise tax. Beyond that, it examines the tax treatment of small business on termination, and post-cessation income tax. Moreover, it examines the tax administration issues of small business taxation in Ethiopia. In the end, the article forwards a recommendation to address the ongoing problems of small business taxation in Ethiopia. The authors employed empirical qualitative research methodology.

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