Frustrated by a recent significant tax increase in category “C” tax payers, which consists small businesses with an annual turnover of up to 100,000 Birr, cities in various parts of the Oromia regional state are seeing protesters testing the streets again.
The new tax is being levied on small businesses with an annual turnover of up to 100,000 birr ($4,300; £3,300) in an effort to boost the tax base and raise much-needed government revenue.
Several letters sent from ERCA to small businesses in Addis Ababa, as well as those in Oromia state, show that traders of small businesses such as street side coffee vendors, barbers, internet cafes and kiosks have received notice letters demanding them to pay annual taxes as high as 50, 000 birr and more.
Similarly, shocked by the increase, many small business owners in the capital Addis Ababa are queuing to return their business licenses or file complaints with the revenue authority.
Over the last week, residents of several cities and towns in Oromia have been posting pictures of damaged public infrastructures such as roads, schools, and hospitals on social media to make a point that taxes collected are simply embezzled than used to improve people’s lives.
On July 05, Nestanet Abera, ERCA deputy director for Addis Abeba tax division, told journalists that the confusion was rather due to lack of understanding than the amounts levied. “We have not imposed such taxes. The confusion is due to lack of understanding and the tendency of considering daily incomes as taxes,” Netsanet said, “our assessments were based on fairness and are appropriate.”
The Ethiopian Revenue and Customs Authority (ERCA) collected over 22 billion Br in tax from Addis Abeba City. This is two billion birr below the set target for the last fiscal year. The figure is up by nearly four billion birr, however, compared to the previous year.
“Though there is an improvement in the amount of money collected, it is not up to our set target,” said Netsanet Abera, the ERCA’s deputy general director and Addis Abeba’s Tax Programme and Development Works Head.
By Etenesh Abera
Read full story on: Addis Standard