Radar | Jul 24,2023
Jun 26 , 2021
By SAMUEL BOGALE ( FORTUNE STAFF WRITER )
The federal government gears up to replace the tax administration system in use for two decades, with tax authorities hoping the new system will ease taxpayers's burden and allow greater transparency.
Estimated to cost 60 million dollars, the Integrated Tax Administration System (ITAS) implementation, a solution to automate tax collections, is a part of a tax transformation programme launched in 2017 in a partnership between Ethiopia and the United Kingdom. A Tax Transformation Office established under the Ministry of Revenues has been working on the Programme, which will eventually allow taxpayers to settle payments online.
The current system, dubbed Standard Integrated Government Tax Administration System (SIGTAS), is not integrated with other government offices.
The tax regime is one of the areas that impact Ethiopia's score in the World Bank's index for ease of doing business. Ethiopia ranks 159th from 190 countries listed in the World Bank's latest Ease of Doing Business report.
Experts aspire to see the new system establish a single window through which businesses comply with regulations, including obtaining tax identification numbers and business registration certificates.
"We reviewed the systems of over 30 countries before deciding to change," Addis Tamire (MD), head of the Office, told Fortune.
A country that has successfully implemented such a system is Nigeria, where the solution helped reduce costs associated with tax collections and enable real-time tracking of invoices. It is also expected to integrate regional revenue bureaus using different tax collection systems, which experts hope will improve the efficacy of the country's revenues collection.
"The outdated tax system must be replaced to generate more revenues," said Dawit Tadesse, assistant professor of accounting and finance at St. Mary College for eight years.
The federal government collects tax revenues lower than the targeted 15pc of GDP.
Dawit hopes to see the new system improve the government revenues' ratio to the GDP, which has been at an average of 11pc.
"An efficient tax administration should invest at least two percent of the revenue collected," said Dawit, a managing partner at Lead Plus Consultancy, a firm that provides tax advisory services. "In Ethiopia, it is way less than one percent."
The work of transitioning to the new system is not easy, and the Office will likely face financial, infrastructural and skill-related constraints during implementation. The project is still awaiting budget approval from the government, as well as funding from international partners.
“Implementing the new system might take a while as we are working on other procedures in advance,” said Lake Ayalew, minister of Revenues.
Addis disclosed to Fortunethat the process to hire a technology partner is under preparation, and authorities expect to issue tenders in the coming six months.
PUBLISHED ON Jun 26,2021 [ VOL 22 , NO 1104]
Radar | Jul 24,2023
Fortune News | Jul 02,2022
Fortune News | Apr 06,2019
Commentaries | Jan 11,2020
Radar | Apr 24,2023
Fortune News | Apr 30,2022
Commentaries | Jan 03,2021
Radar | Jan 26,2019
Fortune News | Nov 20,2021
Commentaries | Nov 21,2018
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Dec 2 , 2023
The symphony of traffic noise in Addis Abeba is not just a sign of life, but a siren...
Nov 25 , 2023
Ethiopia's quest to develop a functioning capital market is a demanding yet not unach...
Nov 18 , 2023
Prime Minister Abiy Ahmed (PhD) has made a fervent call for landlocked Ethiopia to ga...
Nov 11 , 2023
In November last year, a ray of hope pierced the gloomy skies of Ethiopia as the Pret...
I have a love-hate relationship with my phone. It is my go to source for information. I enjoy interacting with text messages and browsing t...
Over the weekend, I attended a wedding where my husband was one of the protocols. Despite the typical joy...
Or see contact page