Agenda | Aug 28,2021
Property owners in Bahir Dar city, the seat of the Amhara Regional State Administration, are running out of time to settle arrears in land lease payments.
The city's Administration issued notice three weeks ago granting leasees a 10-day deadline before beginning to reclaim plots. However, Bahir Dar authorities have yet to take measures until our press time on Saturday.
Officials of the regional state's Revenues Bureau are sifting land lease contracts held by prospective investors using an online platform. The Bureau digitalised its services and went online in 2014, registering close to 12,000 taxpayers on the platform. It has processed land leases issued to 15,000 developers.
"Many are property owners who don't pay their property taxes," said Dresse Sahelu (PhD), mayor of Bahir Dar city.
The city's authorities claim 118 million Br in arrears from 1,285 developers and property owners, with over 71pc owed by 260 developers. Star Business Group (SBG) is one of the leases in question.
Established in 1996 by three shareholders - the late Menwyelet Atnafu, Abebaw Desta and Worku Megra - the Group is in manufacturing, transit services, real estate and transport sectors. It imported edible oil, construction materials and pharmaceuticals and exported oilseeds and coffee. It was reincorporated in 2012, with a registered capital of 63.3 million Br.
SBG leased land in Bahir Dar to erect a five-star hotel and resort on a 220,000Sqm plot at the course of Lake Tana in 1997; the lease price for a square meter was 80 Br. After a year, the city Administration revised the amount to 294 Br, demanding SBG to pay with the revised tariff.
SBG managers complained to the city officials, claiming to pay the previous amount, disclosed Dereje Chanie, the human resource manager. The city cabinet allowed the Group to continue paying with the last tariff from 1999. However, the decision was foregone with the change of city Administration.
Last year, the Revenue Bureau notified the Group's executives to settle 53 million Br in arrears, cautioning them the land leased would be reclaimed should they fail to comply. The company paid 15 million Br in the same year.
"We'll pay," Dereje told Fortune. "We've no choice after all."
The project, launched 18 years ago, has been delayed on several accounts, including the arrest of two shareholders, including Abebaw. Residents in the area filed disputes claiming the city Administration provided the land without demarcation, causing further delay. Close to 80pc of the hotel's construction has been completed; its developers hope to open an international hotel franchised to a major global brand.
"We hope it'll be completed soon," said Dereje.
Mastewal Tekelebirhan, 40, a resident of Bahir Dar city, is one of over a thousand property owners who did not make payment. She leased 10,000Sqm of land around Shendek Kebele seven years ago to build a five-star hotel, hoping to create jobs for close to 100 people.
She blamed the city Administration for the delay, unable to finalise litigation in a court of law.
"The case needed to be closed before transferring the lease," Mastewal said.
Nearly 10 million Br was collected from 12 developers and 124 property owners. The Revenues Bureau collected 2.6 billion Br tax from the region, where lease transactions accounted for one billion Birr, including interests, in the last budget year. The federal government provides 43.3 billion Br in subsidies to cover a budget of 80.1 billion Br for the last fiscal year.
"We're reaching out to taxpayers to address the challenge," said Mulualem Tefera, head of the Bahir Dar Revenues Bureau.
Mohammed Haymen & His Friends is an association formed to lease land and develop a six-storey commercial and residential building two years ago with a projected cost of 18 million Br. Securing a 500Sqm plot near Diaspora Street, the Association has 55 members. The Chairperson, Assefa Teshome, said they could not settle arrears because the city Administration demanded a three-year payment installation to be covered at once.
"We didn't have the budget," said Assefa.
PUBLISHED ON Nov 19,2022 [ VOL 23 , NO 1177]
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