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BusinessMinistry adamant inability to collect taxes in Tigray won’t impact annual target

Ministry adamant inability to collect taxes in Tigray won’t impact annual target

Despite losing two billion Birr in tax revenues in the last three months, the Ministry of Revenues is confident that its inability to collect tax from Tigray will not have an impact on its annual performance.

Before the fighting broke out in Tigray in November 2020, the Ministry had collected 1.8 billion Birr in taxes, accounting for 1.2 percent of its revenues during the first half of the existing fiscal year. 

The Ministry plans to collect 290 billion birr annual revenue for the current budget year, while it has managed to successfully collect around 149 billion birr until last month.

“Although we are not able to collect tax from Tigray due to the law enforcement operation, its impact on our annual performance will be insignificant as the region’s share of the total tax revenues is relatively small,” Laqe Ayalew, Minister of Revenues, told The Reporter.

Business activities have been at a standstill since the beginning of the fighting between the forces of the defunct Tigray People’s Liberation Front (TPLF) and the federal government. The tense security situation in the region also forced factories to temporarily suspend operations. This has rendered collecting taxes difficult even in some towns where there is relative stability.  

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“The Ministry plans to collect close to eight billion Birr from Tigray for this fiscal year and this is very small compared to the 290 billion Birr we plan to collect throughout the country. The total amount of money collected from Tigray is not what it’s reputed to be and it doesn’t affect the total revenue generation,” Laqe said.

The minister said that to achieve the plan and compensate the uncollected revenue from Tigray, burden sharing has been employed on several branches, indicating that branches have successfully met the ministry’s plan.

It is to be recalled that among the top taxpayers and award-winning companies in 2019, Trans Ethiopia paid 417 million birr from its operations in Mekelle, Tigray. According to the Ministry, there are around 2,400 federal taxpayers in Mekelle alone.

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