Authority To Open Large Taxpayers Office


Businesses with annual revenue of 40 million Br or more will be served at a new office




The Addis Abeba Revenues Authority is set to open a new branch for large taxpayers, dedicated to businesses with annual revenue of 40 million Br or more.

The Authority is now looking for an accessible office with amenities such as parking, reliable internet connection access and proximity to the centre of the city, according to Atakilt Gebregiziabher, deputy director of the Authority in charge of tax enforcement.

“The new office will help us deliver quality service,” Atakilt said. “We are currently identifying and assessing taxpayer’s files.”

So far, the Authority has identified 800 large taxpayers to be served at the new branch.

The Authority, which recently split from the Ethiopian Revenues & Customs Authority, has a total of 340,520 taxpayers that are served under four office divisions – micro; small; middle and large taxpayers offices.

Businesses with annual turnover of half a million Birr are categorised under micro and are served at the 116 weredaoffices in the city. Annual turnovers between half a million Birr and five million Birr is allotted for the small taxpayers and are served at the district level. Businesses with annual turnover of five million Birr to 40 million Br will settle their taxes at the city’s four middle taxpayers’ offices.

The federal income tax proclamation classifies taxpayers into three categories: Those who have an annual turnover below half a million Birr, listed under category C; businesses with annual turnovers between half a million and one million Birr, category B; and taxpayers with annual gross income of more than one million Birr are categorised as Category-A.

“The new office will start operations early in November,” said Ataklit, “and most of the public enterprises will be hosted in our new office.”

While in the process of studying the feasibility of the project, the Authority considered experiences of the federal Large Taxpayers Office, and the experience of Kenya and Tanzania. Tamirat Niguse was appointed to head the new office, and he is currently facilitating the opening of the new branch.

The new branch could minimise the frustrations of the business community, according to experts, although it cannot fully solve the problem. Experts also believe that the Authority needs to address additional issues.

“To bring a quality service,” said Yohannes Woldegebriel, a tax law expert, “the Authority should work on addressing the basic causes of the complaints and build quality human resources.”

Since the early 2000s, Ethiopia has adopted a series of tax reforms to streamline and simplify the tax system, such as the reduction of tax rates, broaden the tax base and modernise the revenue collection process. The city tax authority has also implemented amendments to address complaints forwarded by the taxpayers.

“We decreased the tax days to 300,” said Melaku Tessema, communications team coordinator of the Authority. “We have also slashed the turnover tax for the service sector by 50pc to just five percent in the last fiscal year.”

The City Tax Authority collected a total of 27.3 billion Br in the past fiscal year, reaching 87pc of its target. For this fiscal year, it has targeted to collect 44.5 billion Br. In July of this year, the office collected 3.3 billion Br in taxes.

Recently, the Ethiopia Revenue & Customs Authority, which replaced ASYCUDA with a new 4.7-million-euro customs management system, has announced its plan to open a new branch designated for middle-level taxpayers.



By BEHAILU AYELE
FORTUNE STAFF WRITER

Published on Aug 26,2018 [ Vol 19 ,No 957]


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