Tax payers express grievances on the recent Ministry of Revenues tax payer’s recognition, while the ministry unequivocally states that the common denominator is not only higher amounts of money settled but also loyalty.
Almost a fortnight ago, the fourth round of federal tax payers’ recognition ceremony was held at Sheraton Addis hotel in the presence of president Sahle-Work Zewde and other senior government officials.
“The measuring metrics of the recognition with regards to loyalty has to be well tested,” one of the business sector experts that Capital spoke to pointed out, whilst lamenting that, “Most of the recognized taxpayers are based on the customs duty which compulsorily is paid by any importer.”
“Recognition is intended to encourage the entire business community to follow the lead in abiding the law,” said Mahilet Amde, Risk and Compliance Management Directorate Director at the Ministry of Revenue. As she indicated, from the recognized tax payers, 41.7 percent were custom payers while the rest 58.3 percent were domestic tax payers.
With regards to the selection criteria, for domestic tax payers, basic taxpayer information, tax reporting, tax payer’s penalty history, audit findings difference, tax/tax calculation difference amongst others were criteria looked into. Similarly, customs commission revenue contribution, legal compliance, current risk profile, legal compliance history and customs and the type of offense were selection metrics used to select honest taxpayers.
“Primarily taxpayers who comply with the tax and duty laws and procedures and pay their taxes and duties on time are meant to be recognized,” underlined the business sector expert.
“It is good to encourage honest taxpayers. But the measure of loyalty must be thoroughly tested,” emphasized the expert, adding, “Tax payers should be rewarded as an honest tax payer if they paid taxes on the goods or services imported into the country, including the profits he/she has made in the country by personal integrity and drive as opposed to mandatory tax requirements.”
“From the domestic tax, 30 percent of the measurement was the amount and 70 percent was loyalty points used to select the awardees while for the customs tax payers, 50 percent went to the amount while the rest went to loyalty points,” Mahilet explained.
“For the last rounds there were grievances form the business community,” cites Mahilet adding, “This year, so far there are no complaints which have come to the ministry.”
Beside the recognition, tax payers are set to get different kinds of benefits including getting priority in any government service.
On related news, Ethiopia’s annual tax revenue has shown an increasing trend in recent years. However, officials say, its GDP ratio leaves much to be desired.
“We have been working a lot to increase loyal tax payer to which visible changes have been registered. However it is not enough and needs a lot of work,” said Mahilet.
“The recognition aims to encourage winning businesses to continue paying their tax on time and for others to follow suit,” she underpinned.
This year’s program has recognized 400 registered businesses and tax payers that have maintained transparent conduct and paid their taxes in a timely manner.
Tax-payers critic recognition metric
New regulation in the works as Ethiopost revitalizes operation
A new postal regulation is in the making to govern postal and courier services to replace the first Postal Proclamation (Postal Proclamation No.240/1966) by Emperor H/Selassie.
“We expect Posta regulations to be re-formed as there is no legal frame work which governs the postal sector not only Ethiopia’s Posta but also all the couriers in the sector,” said Hanna Aryasilassie, CEO of Ethiopia Posta Service Enterprise.
Ethiopost has been implementing various reform activities aimed at modernizing processes, optimizing its operations, and providing customers with reliable, effective and affordable service.
“The last Posta regulation was adopted in 1966 at the time the only operator in the country was Ethiopia Posta but now there are more than 80 couriers,” the CEO said, adding, “There should be clarification of mandates between us and other couriers. When other couriers focus on only profitable areas, we work on government obligations too without profit. About 80 percent of our branches worked through losses just to be accessible to the public.”
As Hanna indicates, “In other countries there is a so called universal service fund, the entire courier in this sector contribute to finance the designated operator. Due to lack of this, Ethiopost has no other revenue sources. This can’t be sustainable and has impact on us.”
“Ethiopian Communication Authority is the one handling the preparation and we expect it to be finalized before the end of this year,” the CEO expressed her hope on the matter.
Also as the CEO elaborates, Ethiopost is working with the respective office to re-amendment its establishment regulation. The latest Ethiopia Posta Service Enterprise establishment under regulation no.165/2009 transfers the right and obligations of the former Ethiopian postal service operated under proclamation no. 240/1966.
Currently, the enterprise is focusing on updating itself by providing a wide range of E-commerce and various financial services.
“We want to engage in E-commerce and support the nationwide vision of creating and expanding a digital economy. Ethiopost is ideally suited to make this reality through its extensive network of branches and years of experience in the logistic sector,” stated Hanna.
As she explains, Ethiopost has its trial operation of ecommerce this month on transit packages from China to other Africa countries through Ethiopia.
Ethiopost has been through a series of losses over the past years as result of low staff motive and capability, poor customer service, weak marketing and traditional and outdated processes and services. This has rendered the enterprise to become uncompetitive in service provision as well as hindered its financial standing.
The reform activities entailed restructuring the institutional setup, minimizing cost and diversifying services. In collaboration with the Universal Postal Union, Ethiopost is working to leverage its extensive experience in the mail and logistics sector to support e-commerce initiatives in Ethiopia. Last year the enterprise grabbed 187 million birr in profits. For the current fiscal year the enterprise has targeted to generate 1.5 billion birr in revenue.
Public backs gov’t to weed out black market culprits
The National Bank of Ethiopia (NBE) discloses that a flow of tips are streaming in from the public, following its call of cooperation to crackdown on financial foul players who are backtracking Ethiopia’s economy.
According to information that Capital obtained from NBE, the financial sector’s regulatory body, the public has been tipping the regulatory body on several suspicious activities.
Recently, the financial regulatory body took stern and proactive measures on those indulging in;, counterfeit currencies, parallel gold market, taking cash on hand against the NBE directive and other relevant crimes, by inviting and encouraging the public to play a role on tackling the issue.
“We are receiving tips from the public at a very positive and broad range,” an NBE official, who does not have the authority to speak, further on the case told Capital.
Abate Mitiku, Director, Change Management, Planning and Communication Directorate at NBE, early last week told bank CEOs to play an integral role on the mission set by the central bank in collaboration with security apparatuses.
He said that banks have to create awareness on such activities and keep their staff abreast as well as make sure that staffs are not involved in crooked activities.
Some sector experts have put blame on some clerks citing that they are in cahoots with the foul players with regards to illegal remittance at bank branches as well as in the black market.
“Collaborating on the case will help on bank imaging and transparency. Banks should also tighten their controlling measures to weed out illegal activities from their staff,” Abate emphasized, adding, “It is a national issue, thus, as a stakeholder, banks must take part in tackling the problem head on.”
Recently, the central bank disclosed that a task force comprising relevant security bodies and itself was established to crack a whip on illicit financial activities that have been pricking Ethiopia’s economic market.
The task force comprising of financial intelligence, policy and other security apparatuses besides the financial regulatory body has been formed to manage the operation.
NBE announced the implementation of a new directive that also provides benefits to those that collaborate with the central bank and authorities to sniff out the illegal market actors.
As per the new directive, NBE has facilitated reward payouts for those who provide intel on the foul players, citing that rewards will come from the assets of the illegal actors, once they’re assets are seized.
To this end, on October 19, relevant NBE officials disclosed details on how the informants can safely provide intel on the criminals.
Since the parallel market busted exponentially wider in contrast to the legal forex market various stringent measures have been put in place to combat the issue and to close the gap on the exchange disparities.
NBE and the Financial Intelligence Services have frozen hundreds of bank accounts of individuals and companies including betting companies who are involved in illegal remittance.
The illegal gold market has also grabbed headlines to which the regulatory body is paying much attention.
Federal, regional procurement to go fully-digital
The Public Procurement and Property Authority (PPPA) indicates that within the coming 5 years all federal and regional governmental institutions’ procurement will be through its newly launched Electronic Government Procurement (eGP).
Under the eGP platform which has so far 73 public offices, the authority announced that suppliers cannot participate in any bid without registering on to the platform.
On Tuesday, October 25, 2022 the authority met with more than 500 business communities to discuss on the electronic government procurement system on an event held at Haile Grand Hotel. The authority has now called upon all suppliers to register to its eGP platform so as to be part of the public procurement.
As indicated, one of the major goals of emplacing eGP on public procurement is to ensure transparency and to uplift the benefit of the public. So far, the eGP system has been integrated with respective government offices, banks for payment and integration works are being carried out between the two systems for its clients to use telebirr as an e-payment instrument for public procurements.
So far the procurement platform is handling 73 public offices as of April, 2022 and is expected to jump to 125 by the end of the budget year from the total 169 public offices accountable to the central government.
Regional universities and regional government institutions will be part of the system within two to five years after completing the required infrastructure.So far, for those included on the new platform, carrying out procurements through eGP is believed on average to reduce 50 percent of the procurement transaction costs.
PPPA announced that the new system which was introduced about a year ago through a pilot of nine public offices is now facilitating the procurement of 73 central government offices and is now working with Ethio Telecom to integrate telebirr with eGP to provide an alternative payment system for the public procurement proceed.
