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According to a study from the Federal Auditor General, 14 major hotels were using inappropriate cash register software that is not compatible with the software the Ethiopian Revenues and Customs Authority (ERCA) is using. According to the tax laws, ERCA is supposed to approve the machines, but these hotels used international software that is not compatible with the main server of ERCA.
Proclamation 609/2008 states that using unrecognized cash register software is forbidden.
Aweke Tenna, spokesperson of the Federal Auditor General, explained that even if the software does not affect the tax it is still illegal because ERCA did not approve it.
The General Audit also sampled out 29,792 higher tax paying companies and 17,702 or 59.4 percent did not use an electronic cash register machine, making tax collection difficult.
The study also found 26 companies with no tax identification number.
Another issue is that cash register machines require maintenance in order to be accurate.
Desta Bezabeh, Vice Director of ERCA says the Authority did not loose a penny from the unrecognized software. He says that most of the hotels report their taxable income and the authority is working on reducing the number of hotels without the proper machines.