1️⃣ What is public finance?

🔑 Answer: Public finance is the study of how governments use revenue and expenditure to influence the
economy and provide public goods and services.

2️⃣ What is the importance of public finance in Ethiopia?

🔑 Answer: Public finance plays a crucial role in Ethiopia by enabling the government to provide essential
public goods and services, such as healthcare, education, infrastructure, and social welfare. It also helps
to fund poverty reduction programs, promote economic growth, and minimize income inequality.

3️⃣ What are the different types of taxes in Ethiopia?

🔑 Answer: There are different types of taxes in Ethiopia, including income tax, value-added tax (VAT),
excise tax, customs duty, and mining royalty.

4️⃣ How is income tax calculated in Ethiopia?

🔑 Answer: In Ethiopia, income tax is calculated based on a progressive tax system, which means that
individuals pay a higher percentage of tax on their income as they earn more. The tax rates range from
0% to 35%, depending on the income level.

5️⃣ What is value-added tax (VAT) in Ethiopia?

🔑 Answer: VAT is a tax on the value-added at each stage of production and distribution of goods and
services. In Ethiopia, the standard VAT rate is 15%.

6️⃣ What is excise tax in Ethiopia?

🔑 Answer: Excise tax is a tax on specific goods and services, such as alcohol, tobacco, and luxury items.
In Ethiopia, the excise tax rates vary depending on the type of product, ranging from 10% to 100% of the
value.

7️⃣ What is customs duty in Ethiopia?

🔑 Answer: Customs duty is the tax charged on imported goods entering Ethiopia. The duty rates vary
depending on the type of goods and their value.

8️⃣ How does the Ethiopian government use tax revenue?

🔑 Answer: The Ethiopian government uses tax revenue to fund its budget, which includes spending on
public goods and services, social welfare programs, infrastructure, and poverty reduction initiatives. Tax
revenue also helps to promote economic growth and reduce income inequality.