Tax revenue increases despite lopsided collection

 By Abdurezak Mohammed

Modernizing the tax collection and administration pave the way for citizens to contribute their shares for the country’s ambition of self-reliance in undertaking development projects, as experts in the area say. The various efforts in this regard have started to pay off in recent time though not proportionate to earning the economy could generate, they said.

In a report the Ministry of Revenue presented to the parliament yesterday, it said that 98.96 billion birr was collected over the last six months of the fiscal year in effect. The collection represents 80.76 percent of its plan which is to earn 122.18 billion Birr during the fiscal year, Revenue Minister Adanech Abebe indicated. Earning from domestic trade taxation outweighs that of import-export trade, according to her report.

As compared to last year’s same period, the revenue has shown a 7.78-billion Birr increment which is 8.66 percent higher. To her, a number of jobs have been done to enforce laws and prevent contraband trade over the stated period. Hence, the Ministry seized goods worth 394 million Birr intended to smuggle to domestic market.

Similarly, various minerals and forex as well as agricultural products worth114 million birr were intercepted before being smuggled to foreign markets. Compared to earning the economy generates, the current earning is disproportional, the Minister told parliament.

In an interview with The Ethiopian Herald, CEO of Afro-Global Consultancy Services (AGS), Prof. Fissehatsion Mengistu said tax policy, administration and investments in developing countries are very weak. Thus, proper tax design and administration are very important tools in enabling governments to reduce their extreme reliance on foreign financing.

To him, skilled tax administrators, researchers and policy makers could contribute a lot to modernize the tax system. However, in developing countries, especially in Africa, the issue of building the capacity of those involved appears to be neglected. Improving the tax system is a must do task to promote the socio-economic goals of governments to curb consumption, transfer resources as well as reduce economic inequalities and so on, he said.