Ethiopian Revenues and Customs Authority lost more than 400 cash register machines. They have been reported to the Authority both by tax payers and importers. The Authority claimed they had a database which could control the machines but it was able to deactivate around 20 from the server.
The Large Tax Payer Office (LTO) found 50 tax payers out of its 1,100 clients, last fiscal, year using illegal receipts. The companies were carrying 1,583 forged receipts which are worth 703 million birr. The branch conducted a risk based investigation audit on 22 companies out of 50 founded a 8.5 Billion Birr audit gap which it reported to the law enforcement office at the end of the year. LTO also discovered 1164 forged receipts from other branches worth 720 million birr.
The machines which are stolen or lost can only be used to print receipts.
Last week the Federal Bureau of Investigation (FBI) discovered that out of  67 cash register machines 57 were using a a single shelf in one office.
“We are investigating if these machines are among the lost ones. However, there were no transactions and the machines were active,” Brhanu Abate.
Brhanu went on to say that the machines were discovered in several sub-cities.
A criminal investigation will be conducted. This has especially been a problem on construction sites where the contractor receives a receipt when items are delivered.  Even though the prosecution department closed the case in the absence of the intention criminal activity could easily be traced by the auditors before sending their report.
“Every purchaser has the responsibility to do the transaction at the registered working place of the supplier, according to the Commercial Law,” said Hirut Mebrate, Head of the LTO. “Our job in an audit is to see if there is a violated law.”
Research done by the Authority reveals that there are three ways of issuing these receipts and mafia groups are involved. This also contributed greatly to the failure of the revenue collection in recent fiscal years.
Hidden tax payers recruit unemployed or low income individuals and issue a license in their name. The recruits will receive some tip for this activity and most of the time they don’t understand the sophisticated deal behind what is going on. The tax payers will take a cash register machine in their name and will disappear. The well known court case of Biniyam G/Mariyam et al was the milestone in such a case.
Also sometimes tax payers will issue the license and will report their revenue initially but will disappear instantly as they start to issue receipts for non-issued transactions.
Another illegal method is using stolen or lost machines but with the memory of another person who is operating legally somewhere in the country. They will use the phone number, tin number name and other details of the legal tax payer and print the receipt for the other person. The legal tax payer will be told that they need to pay taxes for a transaction they made, but they will disprove this by showing the real transaction at the same date or time.
The most complicated scam, which can be operated by computer professionals, is that they will design the receipt to be similar with the legal one and they will use similar software with the existing one.
“Our current system can’t trace the lost machines,” Tewodros W/Mariyam, Technology leader at the Authority told Capital. “But we propose a new system which can automatically paralyze them. I hope that system will be applicable soon.”