The outcomes of the first quarter of the fiscal year brought pleasant news to those in charge of ensuring the domestic mobilisation drives of the federal government. The Ethiopian Revenue & Customs Authority (ERCA) has not only achieved a quarter of its annual target in three months, beginning July 2014. With close to 33 billion Br already in the public coffer, the Authority has surpassed its plan for the period by 400 million Br.
This has stirred high hopes among the authorities that the failure to meet target seen last year, where the federal government bagged 20 billion Br less than the 126 billion it had hoped, may not be repeated.
The largest revenue of this, representing more than half, came from domestic taxes, an area where the federal government hopes to bag 72.8 billion Br in this fiscal year. Customs duties collected from the imports of merchandise in the country claimed 44.3pc, while the National Lottery Administration (NLA), the nation’s monopoly over gambling and raffle businesses, has contributed 15.38 million Br, representing a mere 0.2pc.
The federal government hopes to mobilise a total of 134.2 billion Br during the current fiscal year, according to Ephrem Mekonnen, communications head of the Authority.
Accomplishing this will be a high feet to the Authority, compared to the struggle it had had back in 2008 to pick up 19 billion Br. An institutional engineering carried out in the same year, under the directorship of Melaku Fenta, now in jail fighting allegations of corruption, brought the Ministry of Revenue, the Ethiopian Customs Authority and the Federal Inland Revenues Authority under a single mammoth federal entity resulted in the collection of far higher revenues in the subsequent years. Last year, for instance, ERCA has collected 106.6 billion Br, although falling short of its plan of 126 billion Br.
However, the nation is far off from bringing in its ambition of boosting tax to pross domestic product (GDP) ratio to 17.1pc, from 14.1pc recorded in 2013/14. Although this figure has a marginal success from 13.7pc recorded in 2010/11, Ethiopia trails far back from the African average of 24pc.
The Authority deploys its thousands of taxmen and women in its 18 branch offices across the country, of which two of the largest mobilisation points are situated in Addis Abeba. Nonetheless, it was these two branches – western and eastern branches – which turned out to be a source of disappointment to the authorities for they have failed to meet their designated targets. They have achieved only 77.6pc of the nearly six billion Birr they were hoped to collect, Ephrem disclosed.
At a press briefing he gave on Thursday, October 23, 2014, at ERCA headquarters, off Equatorial Guinea Street, in Megenagna area, Ephrem blamed lag in time to collect taxes and massive fraud for failure to meet targets. Tax fraud, poor use of cash register machines, which Ephrem conceded is improving, and failure to issue receipts by businesses are reasons Ephrem attributed as major challenge seen during the first quarter.
Branches in Mekelle and Bahir Dar were reportedly points of high tax collection destinations to the Authority.
Leave a Reply