Tax payers express frustration on the implementation of tax amnesty

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Tax payers express their confusion on the implementation of tax amnesty that targets to mitigate the coronavirus economic effects.
The Council of Ministers recently issued a directive to lift a tax claim in two separate schemes that is based on the period of the tax arrears.
The first group listed under the tax dispute stayed until a period of 2015. In this group the government closed the case and called the tax payers to access their clearance. On the other group the tax payers that are in dispute with Ministry of Revenue (MoR) for tax arrears from 2016 to 2019 are beneficiary to settle their outstanding tax and exempted the interest payment and penalties.
In the second option tax payers have got two types of option for their settlement. The first one is settled the 25 percent at an initial stage and the balance within a year, while the second option is that companies will settle the 90 percent at a time and get a relief for the ten percent.
According to tax payers that Capital talked said that they are facing challenges when they try to settle their payment.
“A tax branch that we are reporting told us that we should settle 100 percent of the tax immediately against the scheme that the Council of Ministers issued,” a tax payer told Capital.
The tax payer said that they talked to Tesfaye Tule, State Minister of MoR, to claim their case while they got a response that the detail procedural document of the directive will not allow them to go with the new scheme.
“They told me that the new relief is given for those who finalized their process before the issuance date, which was May 6, of the directive, and due to that we settled all the outstanding taxes at a time,” claimed the tax payer.
According to one of the tax payers, their company planned to pay the 25 percent first and the balance in a year time. “They told us we can only be exempted from the interest and penalty but should pay 100 percent immediately.”
The tax payers claimed that they are confused by the tax authority’s decision and the directive given by the government.
“As the behavior of my business and the current situation I could not settle all the 100 percent of the taxes,” a tax payer, who hoped to pay their duty in different stages, expressed frustration.
The government stated that its tax revenue would be shrinking due to the virus. Recently Ahmed Shide, Minister of Finance, said that government will lose 11 billion birr in the months before the end of the budget year.
“The government said that the tax and non tax collection in the coming months of the budget year will shrink by 11 billion birr, while the indirect tax collection for March has dropped by close to 15 percent compared with the same period of last year,” Ahmed said.
In March the direct tax collection growth rate was limited to 1.6 percent, while the average growth rate pre COVID 19 months was 22.8 percent, according to Ahmed.