The federal government collected close to 337 billion Br from taxes and duties in the fiscal year that ended earlier this month. It is a little over a fifth higher than revenues collected the year prior, and 23 billion Br lower than what officials at the Ministry of Revenues had projected. Domestic taxes, primarily value-added tax (VAT), account for over half of the revenues. Customs duties generated over 140 billion Br. Though officials at the Ministry, headed by Lake Ayalew, say the performance is an improvement, tax revenues are shrinking in real terms due to pandemic, runaway inflation, currency depreciation, civil war, and political instability. Lake is tasked with executing the administration's plan to collect 2.6 trillion Br in taxes over 10 years and boost the tax-to-GDP ratio to around 20pc. It is an ambitious target, as Ethiopia's ratio has been continuously declining for the last decade, dropping to nine percent last year. It is nearly half the 17pc average for Sub-Saharan Africa. Federal tax authorities plan to collect 439 billion Br this year.
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