A technologically advanced tax payment system is coming to Ethiopia. This week, the Investment Climate Facility for Africa signed a 2.8 million dollar grant agreement with the Revenue and Customs Authority (RCuA) to set up an electronic tax payment system.
Nebeyu Samuel, deputy general director of RCuA signed the agreement with Omari Isa, chief executive officer of ICF on Monday July 12, 2010.   IFC will fund 1.4 million dollars of the total project cost while the remaining will be financed by the Ethiopian government, Omari Isa, said.
“The electronic tax payment will simplify the current tax payment system and will save tax payers time and energy,” Nebeyu said during the signing ceremony.
Currently, Ethiopian tax payers must physically go to tax offices. However, There are only two federal tax offices in Addis where the majority of tax payers live and there are only 10 tax offices for the Revenue Agency of the City Administration which collects municipal taxes.
The city administration and the federal tax authority are now utilizing commercial banks in the country to collect taxes by offering a commission for their cooperation. However, this has resulted in long lines at crowded bank tax windows.
Only three out of 15 commercial banks have launched electronic money transfer systems; however their number will increase by 2011 at the time the authority will concludes its electronic tax collection system, according to Nebeyu.
The Investment Climate Facility for Africa (ICF), The International Monitory Fund (IMF) and the World Bank have been working to modernize the country’s tax administration system.
Ethiopia, which  has the lowest tax revenue among Sub-Saharan African Countries, hopes by transforming its tax system will remove barriers to business while increasing funds.