MICROCAPITAL BRIEF: L-IFT Studying Fairness of Presumptive Taxation in Ethiopia

Low-income Financial Transformation (L-IFT), a firm with teams in 13 countries in Africa and Asia, recently reported on a study it is performing with data being collected over one year from 140 small businesses in Ethiopia. The study addresses the way the Ethiopian government taxes enterprises that bring in less than ETB 500,000 (USD 8,900) per year. Rather than asking the businesses to submit financial data, the Ministry of Finance estimates their income based on external characteristics. The goal of the study is to investigate “the accuracy of presumptive taxation, especially as [the small enterprises’] earnings fluctuated from year to year.”

L-IFT’s services center on assisting financial organizations with product development, impact measurement and data access. Among its products is the FINBIT app for tracking users’ financial transactions. L-IFT is woman-owned firm that was founded in 2015.

Sources and Additional Resources

L-IFT newsletter
https://www.linkedin.com/pulse/our-fiji-remittance-presumptive-taxation-projects-l-ift-research-zqpse/

International Centre for Tax and Development study on presumptive taxation in Ethiopia
https://www.ictd.ac/publication/presumptive-taxation-and-equity-evidence-from-ethiopian-informal-sector/

FINBIT app on Google Play
https://play.google.com/store/apps/details?id=com.lift.finbit.lits

FINBIT channel on YouTube
https://youtube.com/@FINBIT-ut2rg

L-IFT homepage
https://l-ift.com

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