Tax Financing of Government Agricultural Expenditure in Ethiopia

Abstract

Recent improvements in agricultural tax performance (indicated by the tax revenue growth) can be traced back to tax reforms in earlier periods. But, rapid growth in government agricultural expenditures and public expenditures generally could not be covered by tax and other non-inflationary revenues alone. The system of deficit financing pursued by the Government has resulted in the manifestation of the so-called "recurrent cost problem" and the "monetization of deficits".