The Addis Abeba Qality Branch Office of the Ethiopian Revenue & Customs Authority (ERCA), has moved its office to other premises following flooding that damaged thousands of files in its previous location. The move has caused its rental fees to snowball; they are now nine times higher than the rental fees at the last location.
The branch office moved to a new location, to two four-storey buildings, located just behind the former office. The previous office was located inside the compound of the Ethiopian Shipping & Logistics Services Enterprise (ESLSE), which was previously owned by COMET Transport S.C before the company was dissolved by ESLSE, which then took over the property.
ERCA had been paying one million Birr rent monthly to ESLSE. The new premises will cost nine million Birr for the two buildings. The branch office moved to the new location two weeks ago on March 29, 2017.
“The process of relocating our office began a month ago. So far we have moved our main departments except supporting units which will also move very soon,” said Teklay Abrha branch manager of ERCA’s Addis Abeba Qality Customs Branch Office.
The new buildings located behind the Authority’s former office, on Bole Ring Road side. It is behind the National Oil Company (NOC) gas station. A local businessperson engaged in importing vehicle lubricants owns the property.
“Before renting these buildings, we did a cost-benefit analysis. We then announced a tender to rent an office after we were granted the budget from the Ministry of Finance & Economic Cooperation,” Teklay told Fortune.
While the main reason for the relocation was the damage from the flooding, the other reason was the inconvenience of the area for employees and customers, as well as inadequate facilities that could not be upgraded, according to Ameleworqe Olana, head of Customer Services at the Qality branch office.
However, the new location is also not suitable for customers as the new office does not have enough parking and is located far from the warehouses, which are still at the original location, according to Wolde Petros, president of the Ethiopian Freight Forwarders & Shipping Agents Association (EFFSAA).
During the flooding that occurred throughout the last rainy season, over 30,000 documents of customers were damaged. In addition to that, the city’s sewerage system flooded the building and the premises of the Branch office causing bad smells in the area.
“The lost files will cost a lot for the customer and the Authority itself,” says a senior official at the Branch office. “According to the law, we have a right to go back a decade and investigate files if we suspect there is tax fraud but once we lost the files, we have no document to review.”
“On the other hand, if customers claim their rights of tax-free and other privileges, it is also impossible to address the issue by referring to their documents,” added this official.
During the last eight months of the current fiscal year, the branch office managed to collect 16.1 billion Br revenue from tax while its target was to raise 20.4 billion Br. This figure showed a 10.6pc decline from the same period last year.
“We tentatively arranged to move entirely to the new office before April 23, 2017,” said Teklay.
The warehouses, which ERCA uses to keep vehicles on a rental basis until issues related to tax are settled, will still stay at the COMET compound while all other offices moved to the new offices.
Getting a rental office has been a problem for the Authority for many years. Two and half years ago the former Director General of the Authority, Beker Shale, said that most of the property owners offer them an inflated rental price to push them away from renting their buildings.
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