Transport owners with permits to operate in Addis Abeba will be compelled to keep audited accounts beginning this year, obliged to comply with a new tax regime the authorities imposed on the sector.

The notice from the authorities followed after transport operators were moved from lower to middle bracket taxpayers status last year. Officials at the Addis Abeba Revenues Bureau were expecting the operators to comply with bookkeeping guidelines. To their dismay, however, almost none of the operators did, attributing the complexity of the transport business as an inconvenience to recording transactions.

The operators were penalised, a measure the authorities lifted later on after pressure from the Ethiopian Transport Employers' Federation leaders, representing 54 transport associations with over 9,000 members. The lobby group wrote a letter to the Bureau appealing for the waiver while claiming its members were unaware of the new requirements.

"Transport owners should have been provided with better information about the bookkeeping system before imposing the penalty," said Dejene Luche, public relations officer at the Federation.

The Bureau used a presumptive tax payment regime to collect income tax from transport owners. It considered seating or carrying capacity, annual turnover, and the age of the vehicles in question in determining the tax.

A cross-country bus with a seating capacity of 50 people was required to pay 7,000 Br in annual tax, while freight trucks with a carrying capacity between 151 and 200 quintals were obliged to pay 9,000 Br. This is no longer applicable for all the transport owners but intra-city operators. According to the letter issued to the Federation, the latter are expected to fulfil their tax duties based on the presumptive tax payment regime.

"It'll stay that way until more research is done to fill gaps, particularly with receipt issuing," said Getachew Girma, head of the tax audit directorate at the Bureau.

Other operators will be required to conduct regular bookkeeping beginning this year.