People who supply sales register machines (SRM) worry that new technology to be implemented as the country attempts to make business easier would cost them jobs.
Sources told Capital that the Association of Cash Register Machine and Software Suppliers sent a letter to the Office of the Prime Minister. The ease of doing business committee was chaired by Prime Minister Abiy Ahmed and recently transferred to the Ministry of Trade and Industry. It has been working to change laws, procedures, and operations to improve the World Bank’s annual ease of doing business ranking.
One of the proposed changes would be replacing the existing SRM with technology used in Rwanda. Committee coordinator Abebe Abebayehu, Commissioner of the Ethiopian Investment Commission, says the new software would save time and money.
However, the SRM suppliers say this could confuse taxpayers. Sources at the association said that the issue was being talked about by taxpayers who fear that SRM’s would cease being used. “We are currently selling the machines to businesses,” a source at one of the machine suppliers, who requested anonymity, told Capital.
He said that the committee should discuss the technology with suppliers before taking further steps. The SRMs have greatly increased tax collection. Eleven years ago, 19 billion birr was collected from taxes and now that figure is 10 times the amount. The government should understand the benefit of the machine, he argued. He went on to say that this is not the right time for the SRM’s be become extinct because many people in Ethiopia are still not computer literate.
Rwanda, which has implemented the new technology, has registered dramatic improvement in their doing business rank. Businesses require a computer (which can be used for other purposes) and a printer to produce invoices.
Suppliers say that purchasing a computer, printer and the Internet, will cost taxpayers more money and may reduce the quality of service. When it launched in April 2018 the Rwanda Revenue Authority provided Internet-based software for free to all VAT registered taxpayers.
Abebe confirmed that replacing the current machines with simple computer-based technology will happen soon. Abebe told Capital that SRM’s will be replaced in stages. “It may start as pilot at selected business in Addis Ababa and in the process it will be expanded to other areas and businesses,” he added. This is being done throughout the world and we have to improve our service, he said.
The association tried to meet with Adanech Abebe, Minister of Revenue but was unable to do so. Sources said that when members of the association talked with Zemede Tefera, State Minister of Revenue, about the issue he said that the ministry is doing this to improve the technology.
Both leaders at the ministry said they don’t have knowledge about replacing SRM’s, but they are informed about the ease of doing business committee, who works to register improvements in various sectors.
In their letter to the PM the association asked to play a part in decisions about the new technology.
“We suppliers and even customers are confused about the current information,” one of the association members told Capital.
Figures Capital obtained from Ministry of Revenue says currently over 200,000 businesses are using SRM which was launched in 2008 throughout Ethiopia. A tax administration expert at the ministry told Capital that the exact figure of the users of SRM is under study. They may not use the Rwandan technology but the ministry will do something to modernize the system.
When the software technology was introduced in Rwanda revenue officials there said the new scheme sharply reduced fraud and was easy to use.