{"type":"script","doc_desc":{"producers":[{"name":"Yukiko Suzuki","abbr":"YS","affiliation":"World Bank","role":"Junior Professional Officer"}],"prod_date":"2023-12","version":"1"},"project_desc":{"title_statement":{"title":"The Presumptive Tax on Small and Microenterprises with a Gender Lens in Ethiopia ","idno":"RR_ETH_2023_53-v01"},"authoring_entity":[{"name":"Hitomi Komatsu","role":"Consultant","affiliation":"World Bank","email":"hkomatsu@worldbank.org"}],"output":[{"type":"WP","title":"The Presumptive Tax on Small and Microenterprises with a Gender Lens in Ethiopia ","description":"Policy Research Working Paper (PRWP) 10707","authors":"Hitomi Komatsu","uri":"http:\/\/documents.worldbank.org\/curated\/en\/099610502202466295\/IDU1a10001d614c4e1487c188fd1577ebc8aadf7","doi":"https:\/\/doi.org\/10.1596\/1813-9450-10707"}],"datasets":[{"name":"Socioeconomic Survey 2018-2019","access_type":"Included in the package under the ESS_2018 folder.\nRegistration(free) is required but it can also be downloaded from the link","uri":"https:\/\/microdata.worldbank.org\/index.php\/catalog\/3823\/get-microdata"},{"name":"Socioeconomic Survey 2021","access_type":"This data is not yet publicly available and is embargoed until it is officially released. \nThe dataset will be available in the Microdata Catalog shortly."}],"software":[{"name":"Stata","version":"14, 16"}],"scripts":[{"file_name":"RR_ETH_2023_53-v01_prg_v01.zip","zip_package":"RR_ETH_2023_53-v01_prg_v01.zip","title":"Reproducibility Package (data and code) for The Presumptive Tax on Small and Microenterprises with a Gender Lens in Ethiopia ","date":"2023-12","software":"Stata 14,16","dependencies":"All dependencies are stored in the ado folder for Stata."}],"geographic_units":[{"code":"ETH","name":"Ethiopia"}],"production_date":"2023-12","abstract":"Governments often use simplified business tax systems, such as presumptive tax regimes, to register and tax small and microenterprises. Despite concerns about how such regimes could disproportionately affect female-owned and low-revenue entrepreneurs, there is a lack of empirical analysis examining the tax burden. The presumptive tax in Ethiopia has a complex assessment system, where the tax liabilities are determined according to the activity type and turnover (99 activities and 19 turnover bands), and some activities do not have a tax-free threshold. This paper uses two rounds of data in the Ethiopian Socioeconomic Surveys and the tax code to analyze the equity and gender implications of the presumptive tax on small and microenterprises by imputing the effective tax rates. There are three key findings. First, the effective tax rates are higher for businesses in the lowest quartile at 4.3% of turnover compared to 1.5% for businesses in the highest quartile, using the most recent survey, resulting in a regressive system. Second, male-owned businesses tend to operate in sectors without a tax-free threshold and are more likely than female-owned businesses to face higher tax rates. Third, the effective tax rates are high for businesses in food and beverage services, which is female-dominated, and for transit services, which is male-dominated, due to the lack of a tax-free threshold for these sectors. The female-dominated food and beverage service sector is also taxed at a higher rate than for trade sectors. The study finds that an alternative presumptive tax system with a single tax rate on turnover and an exemption for all low revenue businesses would be simpler for tax assessment and more progressive. ","topics":[{"id":"H22","vocabulary":"JEL Classifications","name":" Taxation and Subsidies: Incidence ","url":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel"},{"id":"H25","vocabulary":"JEL Classifications","name":" Business Taxes and Subsidies including sales and value-added (VAT) ","url":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel"},{"id":"J16","vocabulary":"JEL Classifications","name":" Economics of Gender; Non-labor Discrimination ","url":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel"}],"keywords":[{"name":"Presumptive tax"},{"name":"taxation"},{"name":"gender"},{"name":"Ethiopia"}],"data_statement":"There are two datasets. The Ethiopia Socioeconomic Survey 2018-2019 and 2021-2022. The first set (2018-2019) is publicly available, and the second data (2021-2022) will be available soon.  ","disclaimer":"The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development\/the World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.","license":[{"name":"Modified BSD3","uri":"https:\/\/opensource.org\/license\/bsd-3-clause\/"}],"contacts":[{"name":"Hitomi Komatsu","role":"Consultant","email":"hkomatsu@worldbank.org"},{"name":"Reproducibility WBG","affiliation":"World Bank","email":"reproducibility@worldbank.org"}],"reproducibility_status":{"type":"All code files (from cleaning to analysis) are included in the package"}},"tags":[{"tag":"All code files (from cleaning to analysis) are included in the package"},{"tag":"DOI"},{"tag":"Some data is temporarily embargoed by the authors (expected to be made public in the future)"},{"tag":"Some outputs are not generated by code (created manually in Excel, ArcGIS, etc) but instructions for"}],"schematype":"script"}