Nexus of Sustainable Development and Tax Laws and Policies under Ethiopian Tax System

Abstract

The tax has been engine for development and is still critical for prosperity of every nation beside its contribution to settle budget deficit and executing huge foreign debt. The tax law/policy is expected to integrate the multifaceted concept of the development that includes ecological, social and economic equity. The countries including Ethiopia design tax legislations to use tax as policy instrument to integrate various elements of development. Whether or not the Ethiopian Tax law and policy are effective and adequate to integrate interdependent elements of development is pending research concern on the table. Specifically, author intends to answer three research objectives: adequacy of Ethiopian tax laws to achieve economic growth, sufficiency of Ethiopia tax law to realize social equity and integration of environmental concern under Ethiopian tax laws and Policies. The author uses qualitative method of study utilizing both primary (laws, cases) and secondary (literatures, reports, etc.) data since this approach enables researcher to explain conceptual underpinning of integration of elements of sustainable development under Ethiopian tax law and policy. The analysis of reviewed data reveals three important empirical findings. First, author found inadequacy tax statutes to integrate economic growth dimension of sustainable development. Second, author concluded that tax legislation could not include social justice dimension of sustainable development. Third, the author observed that inadequacy of Ethiopian tax legislations/legal regimes for mainstreaming ecological/green growth component of sustainable development. The author proposes that the refinement of main Ethiopian tax legislations in such a way that economic, social and ecological equity concerns of sustainable development would be adequately mainstreamed.