Determinants of Custom Duty Tax Performance in Ethiopia: Time Series

The study has examined the determinants of custom duty tax revenues performance by using multivariate time series with annual time series data from 1980 to 2017. Post Positivism research approach has been used. The long-run and short-run equation has been identified by using Johnson co-integration and the VECM model of estimation has been used. The model was stable, stationary at first difference but, not at level, with no autocorrelation, and normally distributed. The long-run estimation result revealed that import value and openness has positive and negative significant effect respectively on custom duty tax revue in Ethiopia while inflation rate and real GDP has no significant effect on custom duty tax. In the short run, import value hurts custom duty tax, and also it is statistically significant. The inflation rate which is measured by the consumer price index (CPI) hurts custom duty tax revenue in the short run while trade openness (OPN) is positive which means the trade openness has a positive effect on custom duty tax in the short run and also statistically significant.