MEKELLE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE
MA IN ACCOUNTING AND AUDITING
ADVANCED TAXATION (ACAD 513)
COURSE OUTLINE
Credit Hour: 3
Session of Course Offering: Year I, Semester I

Course Description
This course is designed to provide students with a sound understanding of taxation in general and
the Ethiopian tax system in particular. It considers the problems and options in theory while at
the same time providing some insight into the practical implications of taxes. The course thus
provides the skills necessary to appreciate the concepts and principles underlying the various
aspects of a tax system. Topics to be covered include: Taxation an introduction, types of taxes
and tax systems (tax on income, tax on commodities, tax on wealth, and tax administration and
tax compliance), international taxation issues, taxation and corporate financial decision making,
tax evasion and avoidance and the Ethiopian tax system.

Course Objective:
The aim of this course is to give an understanding of the theoretical issues associated with
taxation. Furthermore, this course intends to create awareness among students about the role of
taxation in the financial management of businesses; and also to enable students appreciate the
role and significance of taxation in economic development.
After completion of this course, students should be able to:

identify the characteristics of taxes and taxation in general;

understand the objectives and principles of a tax policy proposal and conflicts among
some of them;

explain the problems in the application of the principles of a tax policy proposal like
equity principle;
1

comprehend the types of taxes and tax system and practical problems in deciding on tax
bases (income, value added and other tax bases);

explain the various issues in international taxation regime including issues of taxation of
foreign source incomes, international double taxation and international tax avoidance
through subsidiaries and transfer prices;

comprehend on the role of taxation in financial decision makings such as investment,

dividend and finance decisions;

distinguish between tax avoidance and evasion; and

examine the Ethiopian tax system.

Requirements: regular attendance, class preparation and participation, completion of all

assignments, write mid and final examination and willingness to work hard and learn.

Course Outline:
Chapter 1: Introduction to Taxation
1.1 Definition and characteristics of Taxation and Tax
1.2 Objectives of Taxation
1.3 Principles of Taxation
Chapter 2: Types of Taxes and Tax Systems
2.1

Single and Multiple Tax Systems

2.2

Direct and Indirect Taxation

2.3.

Ad Valorem and Unit Taxes

2.4.

Proportional, Progressive and Regressive Tax Systems

2.5.

Types of Taxes:
2.5.1. Taxes on Income
2.5.2. Taxes on Commodities
2.5.3. Taxes on Wealth

2.6.

Presumptive Tax System

Chapter 3: International Taxation Issues

3.1.

Overview of International Taxation

3.2.

Taxation of Multinational Companies

3.3.

Problems in International Taxation

Chapter 4: Taxation and Corporate Financial Decision Making

4.1.

Taxation and Corporate Finance Policy

4.2.

Taxation and Dividend Policy

4.3.

Taxation and Investment Decisions

Chapter5: Tax Evasion and Avoidance

5.1.

Tax Avoidance

5.2.

Tax Evasion
5.2.1 Causes of Tax Evasion
5.2.1 Remedies for Tax Evasion

5.3

Tax planning

5.4

Tax delinquency

Chapter 6: The Ethiopian Tax System

6.1. Legal Foundations of the Tax System
6.2. Features of the Ethiopian Income Taxes
6.3. Features of the Ethiopian VAT and Other Types of Taxes

Mode of delivery:
It should include lectures, case analysis and discussions, individual and group presentations,
simulations and other modes which are more appropriate to the course.

Assessment and Evaluation of the Course:

Presentations of cases and assignments and discussions................. 25%
Quizzes, tests and/or mid exam 25%
Final examination that must cover all parts of the course ...50%
Total....100%

Reference:
R A Musgrave and PB Musgrave 1989, Public finance in theory and practice, 5th
ed., McGraw Hill, Singapore.
Alan A Tait 1988, Value added tax: International practice and problems,
International Monetary Fund, Washington DC.
L Ebril, M Keen, J Bodin and V summers 2001, The modern VAT, IMF,
Washington DC.
R Bird and P Gendron 2007, The VAT in developing and transitional countries,
Cambridge University Press, New York.
Relevant Ethiopian Tax Proclamations and Regulations.