The Addis Ababa Building Permit and Control Authority has begun counting buildings in preparation for the imposition of a property tax this year. All completed and unfinished private, public, and religiously linked structures are included in the data collection process.
The Authority has been conducting a citywide building census for two weeks, and the first phase should be completed in three months at most. The counting is performed by authority employees walking around the entire city, block by block.
According to Dawit Hundesa (Eng.), deputy director of the Building Permit and Control Authority, one of the reasons for the building census is the need to organize and use the resources in a modern manner for tax collection, research, and other purposes.
The first phase of the census will include data from all 11 sub-cities’ G+1 and above buildings. Dawit said that once the first phase is completed, the Authority would go on tallying villas and other types of residential complexes.
“The precise number of buildings in Addis Ababa is unknown because the data is not digitally integrated. Furthermore, it is governed by numerous institutions; hence, counting will provide a remedy to such gaps, ” he stated. Yet, it is unclear how the authority, which is required to file every construction or maintenance permit it issues, could be missing such information.
The International Centre for Tax and Development (ICTD) indicated in a working paper that the idea of taxing property in Ethiopia dates back to 1937, when the country was governed by Italy. The tax was always computed using the annual market value of the property rather than its capital value.
Despite the existence of a municipal tax known variously as “roof tax” or “city house tax,” Ethiopia currently lacks explicit property tax regulations. Ethiopia’s property tax collection trend was nearly non-existent, leading the government to issue a new property tax proclamation just last month.
In Ethiopia, there was also no distinct entity tasked with collecting property taxes. When such a question arises, the constitution requires a joint session of the House of Peoples’ Representatives (HPR) and the House of Federation (HoF) to convene and determine.
Based on the proclamation, the HPR and HoF met on January 11, 2023, to debate whether property tax collection should be the responsibility of the federal government or local governments. Ultimately, local governments and municipalities were given the authority to collect property taxes.
The regional states will collect the tax and transfer the money to the local authorities in accordance with their constitutional duties, according to the draft resolution. In accordance with this, the municipality of Addis Ababa has already begun counting properties in preparation for the impending collection of property taxes.