Ethiopian Review

A series of legal measures by the Revenue and Customs Authority (RCuA) targeting the country’s high tax payers is playing heavily on the minds of the Ethiopian business community.
High earners were asked last week to register all of their businesses, fixed and movable assets.
The authority targeted only 620 high tax payers listed at the top of a category that contains 13,000 businesses.
The requested 620 tax payers are listed by the authority as main contributors to the country’s revenue, according to the department head of the high tax payer category, with 70 percent of the revenue being obtained through taxes collected from them.
Updating information about these businesses could signify extra income for the country’s coffers.
All movable assets such as machinery including serial numbers, license numbers of vehicles and fixed assets are among the details that need updating.
“It will help us to identify where their businesses are located and the exact depreciation value of their assets,” the department head told Capital.
The recent restructuring has provided the authority with adequate power including a well structured data filing system, to put the new update into practice. They are helped by a strong law enforcement department and the cooperation of intelligence officers, prosecutors and the federal police.
Given the new muscle the authority acquired, it has commenced various operations, including post auditing various documents of high tax payers submitted for the last three years and a massive investigation over the Value Added Tax (VAT) offences.
The authority has post audited over 1,000 top bracket tax payers and found over 800 million birr in tax arrears. Accordingly they have decided to conduct post auditing on all tax payers found in this category.
The authority also arrested some 80 business people over VAT offences and has already won court victory against some of the offenders two months ago.
The new requirement to register tax payer’s assets has raised anxiety amongst business communities who fear it will make their companies vulnerable and liable to higher tax expenses.

- By Yohannes Anberbir | Capital Ethiopia