Over one million birr of illegally smuggled second hand clothing and coffee was seized in Hawassa after the Ethiopian Revenue and Custom Authority (ERCA) was tipped. During the crackdown which began around 9:00 pm last Thursday and lasted for over an hour, gunfire was exchanged, according to Capital sources in the city. Though there is no confirmation from the Customs manager, it is said that a 16 year old boy was wounded. Capital confirmed that a number of suspected smugglers and others were arrested.
“The smugglers were trying to escape by firing guns in the air to create panic. There were no casualties because we were able to act quickly and professionally. And we managed to seize second hand clothing and coffee estimated to be worth over one million birr,” Yared Fekade, the authority branch office manager told Capital on a telephone interview Friday.
ERCA has introduced an incentive mechanism for the community who tip authorities about misdoings in relation to tax and custom duty, in its bid to discourage illegal practices. The authority has received 2,632 tips in the past six months. Of the total information received, 1,643 were found correct while 989 were proved wrong. The authority has paid close to 24.8 million birr to compensate those who have given the authority accurate information. Through this motivation, the authority raked in 124.4 million birr from arrested smugglers alone.
ERCA has increased domestic revenue, from a mere five billion birr five years ago, to 51 billion birr last year. More than 70 percent of this revenue was collected from 962 large tax payers, according to information obtained from the authority.
The federal government tasked ERCA to bring in about 71 billion birr in taxes and lottery sales’ profit in twelve months to partially cover the year’s record budget of 117.8 billion birr. During the first six months of the fiscal year, July to December; ERCA almost managed to meet half of the year targets by collecting 35.1 billion birr. However, it fell well short of its own ambitions of amassing over 38 billion birr during the period.