Tax-payers critic recognition metric

Tax payers express grievances on the recent Ministry of Revenues tax payer’s recognition, while the ministry unequivocally states that the common denominator is not only higher amounts of money settled but also loyalty.
Almost a fortnight ago, the fourth round of federal tax payers’ recognition ceremony was held at Sheraton Addis hotel in the presence of president Sahle-Work Zewde and other senior government officials.
“The measuring metrics of the recognition with regards to loyalty has to be well tested,” one of the business sector experts that Capital spoke to pointed out, whilst lamenting that, “Most of the recognized taxpayers are based on the customs duty which compulsorily is paid by any importer.”
“Recognition is intended to encourage the entire business community to follow the lead in abiding the law,” said Mahilet Amde, Risk and Compliance Management Directorate Director at the Ministry of Revenue. As she indicated, from the recognized tax payers, 41.7 percent were custom payers while the rest 58.3 percent were domestic tax payers.
With regards to the selection criteria, for domestic tax payers, basic taxpayer information, tax reporting, tax payer’s penalty history, audit findings difference, tax/tax calculation difference amongst others were criteria looked into. Similarly, customs commission revenue contribution, legal compliance, current risk profile, legal compliance history and customs and the type of offense were selection metrics used to select honest taxpayers.
“Primarily taxpayers who comply with the tax and duty laws and procedures and pay their taxes and duties on time are meant to be recognized,” underlined the business sector expert.
“It is good to encourage honest taxpayers. But the measure of loyalty must be thoroughly tested,” emphasized the expert, adding, “Tax payers should be rewarded as an honest tax payer if they paid taxes on the goods or services imported into the country, including the profits he/she has made in the country by personal integrity and drive as opposed to mandatory tax requirements.”
“From the domestic tax, 30 percent of the measurement was the amount and 70 percent was loyalty points used to select the awardees while for the customs tax payers, 50 percent went to the amount while the rest went to loyalty points,” Mahilet explained.
“For the last rounds there were grievances form the business community,” cites Mahilet adding, “This year, so far there are no complaints which have come to the ministry.”
Beside the recognition, tax payers are set to get different kinds of benefits including getting priority in any government service.
On related news, Ethiopia’s annual tax revenue has shown an increasing trend in recent years. However, officials say, its GDP ratio leaves much to be desired.
“We have been working a lot to increase loyal tax payer to which visible changes have been registered. However it is not enough and needs a lot of work,” said Mahilet.
“The recognition aims to encourage winning businesses to continue paying their tax on time and for others to follow suit,” she underpinned.
This year’s program has recognized 400 registered businesses and tax payers that have maintained transparent conduct and paid their taxes in a timely manner.