埃塞俄比亚-财政联邦主义：中期财政政策考虑

Ethiopia -FiscalFederalism: FiscalPolicy Considerations forthe Medium Term Volodymyr Tulin SIP/2025/107 IMF Selected Issues Papers are prepared by IMF staff asbackground documentation for periodic consultations withmember countries.It is based on the information available atthe time it was completed on June 16, 2025. This paper is alsopublished separately as IMF Country Report No 2025/189. 2025JUL IMF Selected Issues Paper African Department Ethiopia -Fiscal Federalism: Fiscal Policy Considerations for the Medium TermPrepared by Volodymyr TulinAuthorized for distribution by Annalisa FedelinoJuly 2025 IMF Selected Issues Papersare prepared by IMF staff as background documentation for periodicconsultations with member countries.It is based on the information available at the time it wascompleted on June 16, 2025. This paper is also published separately as IMF Country Report No 2025/189. ABSTRACT:Ethiopia’s interregional fiscal arrangements entail a sizable redistribution of resources. They helpthe objective of income redistribution and equity, as well as providing partial insurance against regionalmacroeconomic shocks. However, overall transfers from the federal government to regions have beenconstrained by limited fiscal space. By law, regions cannot borrow without Ministry of Finance approval. Thereis room to improve redistribution and stabilization features of Ethiopia’s government finances, strengthenregional budgetary frameworks, and mobilize domestic resources to support socio-economic development.Implementation of revenue mobilization reforms will require support from the federal government to strengthentax administration in the regions. Lastly, the curtailment of overseas development assistance woulddisproportionately affect regions with large humanitarian and disaster risk expenditure requirements. RECOMMENDED CITATION:Tulin, Volodymyr (2025). “Ethiopia - Fiscal Federalism: Fiscal PolicyConsiderations for the Medium Term” IMF Selected Issues Paper No.2025/107; Washington, D.C. InternationalMonetary Fund Ethiopia -Fiscal Federalism:Fiscal Policy Considerationsfor the Medium Term Federal Democratic Republic ofEthiopia Prepared by Volodymyr Tulin THE FEDERAL DEMOCRATICREPUBLIC OF ETHIOPIA SELECTED ISSUES ApprovedByAfrican Department PreparedbyVolodymyr Tulin ETHIOPIA—FISCAL FEDERALISM: FISCAL POLICY CONSIDERATIONS FOR THEMEDIUM TERM __________________________________________________________________________2 A. Main Characteristics of Intergovernmental Relations in Historic and Regional Context2B. Revenue: Recent Developments and Reform Consideration____________________________4C. Regional Grant Framework_____________________________________________________________7D. Macroeconomic Implications _________________________________________________________11 TABLES 1. Taxation Powers of the Federal and Regional Governments___________________________132. FY2020/21 Joint Revenue Sharing Reform_____________________________________________14 References_______________________________________________________________________________15 ETHIOPIA—FISCAL FEDERALISM: FISCAL POLICYCONSIDERATIONS FOR THE MEDIUM TERM A.Main Characteristics of Intergovernmental Relations in Historic andRegional Context 1.The process of fiscal decentralization in Ethiopia started three decades ago.Thefoundational elements of revenue-sharing, regional self-governance, spending mandates, and fiscalresponsibility are enshrined in the National Constitution approved in December 1994. Ethiopia’sfederal structures reflect ethnic or linguistics groups, with considerable variation in terms of landarea, population, economic development, and urbanization. From the initial setup of nine states, thenumber of federal constituencies expanded over time to twelve, with the most recent change in2023 with the three new regions formed from the previously Southern Nations, Nationalities, and Peoples’ Region (SNNPR). Ethiopia’s twolargest cities, Addis Ababa and Dire Dawa,are under federal government jurisdiction. 2.A distinctive feature of Ethiopia’sfiscal federalism is the split of revenueraising powers between federal andregional governments according to taxsources.Revenues are categorized asfederal, state, or joint. The federalgovernment has an exclusive right to taxinternational trade, domestic indirect taxes(VAT and excise) are split according to jointrevenue sharing formulas, while regionalgovernments collect direct taxes (includingPIT) and certain royalties and fees (Table 1).For taxes not mentioned explicitly, the Constitution includes a mechanism to establish revenue assignment (a two-thirds majority vote ofthe joint session of the House of the Federation and the House of Peoples’ Representatives). Thismechanism applies to several new taxes envisaged under the National Medium-Term RevenueStrategy, namely property and motor vehicle circulation taxes. 3.Expenditure responsibilities in Ethiopia are close to those of highly decen