The Ministry of Revenue (MoR) has officially charged 65 people out of the 105 placed under custody suspected of tax fraud and evasion activities.
Adanech Abebe, Minister of Revenues,on Tuesday revealed that her ministry has taken measures on a total of 135 companies in relation to tax fraud and evasion amounting to 14 billion birr. She disclosed that a thorough investigation and assessment into the tax payment history of these companies, dating back five years, has revealed some interesting findings.
A day after her press conference, the names and business areas of the 64 companies included in the charge sheet were released and they were reported to have appeared before court. It was also disclosed that the suspected organizations have been engaged in specific businesses such as manufacturing, import and export, distribution, wholesaling and construction (level-one contractors and construction material supply).
In addition, business operators engaged in cosmetics trade, electronics, garments and leather products, mobile phones and accessories, stationeries, service providers as well as Hotel operators are also included in the list of companies.
During the press conference, Adanech told journalists that after the investigations,the ministry was able to identify several companies that failed to issue a sales receipt and have declared bankruptcy falsely.
She went on to say that audit activities have found over 57 companies violating Tax laws, and their cases has been referred to the Attorney General so that criminal charges can be leveled against them.
The latest operation is said to be the first campaign conducted bylaw enforcement body since PM Abiy Ahmed (PhD) came to power.
It is to be recalled that a similar campaign had taken place during the Former Prime Minister Hailemariam Dessalegn’s administration.
During the 2015 corruption and tax-evasion crackdown, the government had arrested several prominent business people in the country as well as senior officials of the then Ethiopian Revenue and Customer Authority (ERCA).
In a related development, the ministry has also announced new steps in modernizing its services to enable it to fully collect tax from large taxpayers using an electronic payment system.
In related news,the Ministry announced on Wednesday that this e-tax payment system has been tested for about a year now, as a pilot project by 11 companies, and is expected to be fully operational soon. The e-tax payment system has been tested on the system of Commercial Bank of Ethiopia, the state-owned financial institution which has over half the market share of the banking business in Ethiopia.
Currently, there are 770 large taxpayers in Ethiopia representing 70 percent of the total tax income of the country. One of the large taxpayers in Ethiopia is Ethio-Telecom, which has used the e-tax system to pay 4.1 billion birr in the first six months of the current fiscal year and the ministry said that, mega state enterprises will soon start paying their taxes using an electronic payment system.
“Out of this amount we paid 70 percent using the new electronic tax system,” said Asegid Ayele, chief financial officer of Ethio Telecom while announcing the company’s six moth performance report last month.
According to the MoR,in the past few years, the tax authority has been implementing an electronic tax reporting and filing of documents of large taxpayers; and the e-tax payment is the extension of that.