Ethiopia employs presumptive taxes as a streamlined means of collecting income from tiny informal sector businesses. This is a form of direct tax.
The Ethiopian Revenue and Customs Authority (ERCA) conducts an assessment procedure to determine the income received by small informal sector firms in order to enforce its presumptive tax.
Ethiopian tax legislation includes both direct and indirect taxes. Personal income tax, rental tax, withholding tax, company profit tax, and other taxes are the five types of direct taxes.
The most common forms of indirect taxes are VAT, customs duty, excise, and turnover taxes.
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