Tax Season Taxes Gov’t, Payers

Tents could be spotted for much of July across the 10 districts of Addis Abeba. They were set up for the purpose of accommodating the thousands of category “C” taxpayers that made their way to their respective wereda offices to meet the tax deadlines slated for them.

In just three weeks, the Addis Abeba City Administration Revenue Authority collected almost two billion Birr from this lower category of taxpayers, who make up almost two-thirds of the city’s tax base. This group is taxed based on a “presumptive taxation” system of regular assessment, rather than on size of earnings. The last assessment was done in 2017.

The process of complying with the tax system has divided taxpayers. For some, it is a continual source of frustration, while for others it is convenient and has enabled them to settle their taxes in half an hour.

The authorities believe that there are administrative issues that have to be ironed out, and that lack of public awareness and information dissemination are the chief challenges facing the government. To improve the system, the authorities are working on raising public awareness, defusing the use of technology in tax compliance and undertaking studies to continually reform the structure.

This tax season comes a year after a contentious period of last year. After reassessments of the annual revenues of taxpayers who keep no books of accounts, thousands of complaints flooded the authorities by business owners who claimed that their taxes were unfairly raised. The authorities claimed that all complaints have since been resolved.

The nation has one of sub-Saharan Africa’s lowest tax-to-GDP ratios. Given the cash crunch the nation has faced since the last fiscal year, the Ethiopian Revenues & Customs Authority has been bumping up its efforts to collect taxes. In the new fiscal year, the federal government plans to cover over two-thirds of its 346.9 billion Br budget from tax revenues. YOU CAN READ THE FULL AGENDA HERE.

Published on Aug 09,2018 [ Vol 19 ,No 954]



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