Parliament Raises Concern over Stagnant Tax-GDP Ratio

Jul 1 , 2023

The Standing Committee on Plan, Finance & Budget chaired by Desalegn Wodajo expressed concern over the stagnant tax-to-GDP ratio in the past two years during the performance report presentation of the Ministry of Revenues. New taxes on property, expansion of taxable services in VAT and readjustment of the ratified excise tax proclamation will broaden the tax base, according to State Minister Meseret Bekele. He assured the standing committee that there will be a rise in the ratio within the coming year. The Committee Chair expressed a welcoming attitude towards any new taxes stating the committee's willingness to ratify any law that helps to increase revenue generation. The government seeks to broaden its tax base aiming for an 18.2pc tax to GDP ratio within the next five years. It will be monumental feet to climb, having a 10 percentage point increase in insight. Under Aynalem Nigussie, the Ministry collected 405 billion Br in the year, a marked 30.9pc jump from the last year, meeting 98pc of its tax goals. The customs commission accounts for 161.4 billion Br while domestic revenues stand at 243 billion Br. Aynalem disclosed that increased collection on behalf of regional states, which climbed by 15 billion Br from the previous year to 53.3 billion Br was the reason that the Ministry could not transfer 50 billion Br to the national treasury at the Ministry of Finance. She argued the Ministry is performing well according to key performance indicators, attributing the untransferred funds as arising from policy issues.