Law, Management, Accounting and Economics fields are eligible for the license
The Ministry of Finance and Economic Cooperation (MOFEC) tabled a draft directive to license tax agents to represent tax payers. The bill which was presented to the business community for consultation made Accounting, Management, Economics and Law Bachelor Degree holders eligible for the license.
Five years of experience at a tax agency job and possession of a business license to provide this service are among criteria needed to become a representative. ERCA is responsible for evaluating the competence of agents and monitoring their activities.
The agent will represent the clients regarding every aspect of tax related issues including declaring taxes, complaints and representing their interests.
The law was deemed necessary because tax payers wanted a professional to help them navigate the tax system.
ERCA will give trainings prior to issuing a license to the agents followed by a written test. A candidate must score above 50% to get a competence certificate, according to the draft.
Two different levels of licenses are being presented by the draft where one is an agent who can represent every type of taxpayer and another is an agent which cannot represent Level A taxpayers.
The agents are prohibited from declining to answer clarification presented by the Authority, undertaking activities without renewing their license and undertaking agent activities which are not in the permitted levels and in addition, must follow other income tax laws.
The national Audit Board believes only accountants should be allowed to be tax agents and not other degree holders.
“If the role of the tax agent is limited to liaison responsibility we can agree but if the activity is extended to the entire financial activities it will be a regrettable decision by the government,” said Gashe Yemane Desta, CEO of the board.
Gashe believes that the application of the directive will incur additional cost to the tax payer who will be obliged to hire an auditor to do the financial work and to hire an agent to communicate with the Authority. He cited the United Sates’ experience of allowing agents from other professions because of the imbalance between the business community and professionals which he believes to be not the case in Ethiopia.
“There are enough accountants in Ethiopia which can do the professional work,” he said.
The bill also demanded a guarantee of 10,000 birr for a level one agent and 50,000 birr for level two agents.
The draft will come into effective after the Minister, Abraham Tekeste (PhD), of MoFEC signed its approval.