Performance and Prospects of Tax Collection in Ethiopia

13 Jul 2017

Domestic resource mobilization (DRM) refers to the process in which countries raise domestic resources and spend these funds to provide goods and services to their people. This includes tax collection, non- tax revenues, domestic borrowing, and from other domestic income sources but it doesn’t necessarily have to mean introducing new taxes or increasing the tax rates. For developing countries DRM is the only dependable and long term source of development financing in terms of sustainability and reliability. It is widely accepted that international sources like ODA, remittances, exports and other inflows are not reliable and insufficient to finance development plans and stimulate development in developing countries. There is a growing emphasis on domestic resource mobilization in developing countries to finance their development agendas. DRM increases the ability of governments to achieve long-term objectives by enhancing fiscal sustainability.

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