The Ministry of Revenue announced that during the first quarter of the fiscal year they collected 3.21 billion birr less revenue than they expected. Income collected from inland tax during the first quarter was expected to be 28.8 billion birr.
The gap is even higher because there is seven billion birr in uncollected customs duties which has raised the amount of uncollected revenue to 10.72 billion birr, according to Netsanet Abera, Deputy Director at the Ministry.
“The decline in revenue is lower than the same period during the last fiscal year,” Netsanet told journalists. “We are hoping the gap will be filled by revenue that we collect this month when 90 percent of taxpayers pay their annual taxes.”  At the beginning of the current fiscal year, the parliament approved a 346.9 billion birr budget and 70 percent of that was to be generated from taxes and customs duties. The budget which was 3.6 percent (12 billion birr) higher than the previous fiscal year was five percent lower than the 2017/18 budget year due to the 15% devaluation of birr against the basket of major currencies.
Prime Minister Abey Ahmed (Ph.D.) told the parliament while defending the budget that the plan to finish mega projects and start  new projects this fiscal year may not happen because they have generated enough  revenue.  Abraham Tekeste (Ph.D.), former Minister at MoFEC, also told the parliament that the nation will be forced to transfer disbursement of 50 billion birr for the coming year.
Despite the government’s action  to tighten its projects and avoid an elastic budget, the Ministry failed to meet its plan compared to last year.
Non-declared transactions are the biggest reason for lack of revenue collection, according to Netsanet. “The culture of demanding receipts must be raised in addition to better law enforcement from the Ministry,” she said.