Excise tax tweak expected to yield extra 10 billion birr
Tax authorities plan to rake in more than 30 billion birr annually from a proposed property tax, a key move to increase domestic revenue sources.
Regional states and city administrations are slated to collect property tax under the resolution that was approved by the House of Federation and House of Peoples’ Representative (HoPR) last January.
The property tax proclamation, which is still in drafting stage, awaits approval from the Council of Ministers before moving to Parliament for lawmakers’ vote.
“Once approved, at least 30 billion birr or more in revenue could be generated from the property tax,” said Desalegn Wedaje, chair of the Parliament’s Budget and Finance Affairs Standing Committee.
After regional administrations were granted the right to collect the planned property taxes, the Ministry of Finance and the Parliament reviewed estimates for revenue potential.
The government approved an 801 billion birr budget for the coming fiscal year, planning to cover 441 billion birr of that through tax income.
“Through tax administration and others reforms, we will increase tax revenue, which is the main budgetary resource,” Desalegn told Parliamentarians on June 6, in the presence of Prime Minister Abiy Ahmed (PhD).
Following revisions to the excise tax proclamation and excise stamps set to take effect next fiscal year, the federal government also expects an additional 10 billion birr in tax income from this category.
Officials aim to implement strict measures in tax reforms with lawmakers’ approval.
“It is necessary to be stricter in tax collection, especially from those with the ability to pay. An additional 93 billion birr in revenue is planned this year,” Desalegn said.
The budget proclamation for the coming fiscal year forecasts raising 559 billion birr from all sources, including loans and grants. Domestic taxes are set to cover 79 percent of the income.
Tax collection during the just-ended fiscal year fell short of targets. In 11 months, authorities gathered around 405 billion birr in taxes: 243 billion birr from domestic revenue and 161 birr from import and export duties and taxes. This met only 98 percent of the Ministry of Revenue’s collection plan for the fiscal year.
property tax in Ethiopia
