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The disagreement between the Chinese telecom firm ZTE (H.K) Limited and Ethiopian Revenue and Customs Authority (ERCA) is settled after the government lifted the penalty and interest fee sanctioned on ZTE by the tax collector.
ZTE has been requested by ERCA to pay about 920 million birr taxation arrears, however, the company turned down the request saying the amount is very high than the actual tax it has to pay for the government.
The Chinese telecom firm, that undertook the 1.7 billion dollar telecom expansion project in 2010, has been requested by ERCA to pay an income tax of 157 million birr with interest and penalty.
ERCA claims that ZTE owed 900 million birr in unpaid taxes, penalties and interest out of the total sum of 920 million after the company settled the 20 million birr.
Following an appeal by ZTE to the authority, the amount was reduced to 522 million birr. Yet ZTE has countered that the reduced amount was still high.
ZTE has admitted that it should pay 157 million birr in tax excluding penalties and interest.
Public Relation Head of ERCA Efrem Mekonnen said that the company and ERCA have agreed to settle the disagreement.
ZTE had also appealed to the Ministry of Finance and Economic Development (MoFED) and the Prime Minister Office to bring a resolution to the contention.
According to Efrem, MoFED, which is the responsible body to lift the interest payment, has accepted ZTE’s claim and override the payment of the interest, while ERCA has also agreed to lift the penalty.
“We have lifted the penalty on special consideration and ZTE has agreed to pay the tax within three years,” Efrem added. He explained that the company has started paying the cash on a monthly basis.
Capital’s effort to find out the exact amount that ZTE will pay to the government in taxation is unfruitful as concerned authorities declined to give information.
Officials at La Gare branch of ERCA, who are responsible to examine such kind of cases, declined to give any statement on the issue.
ZTE officials also declined to comment on the issue.