Car importers have raised serious concerns about excessive taxation and the freezing of their bank accounts, alleging that their funds are being illegally diverted to government coffers. According to a letter from the Addis Ababa City Revenue Bureau, traders who fail to comply with tax demands face account suspensions, leading to significant financial losses.
Importers have reported that their accounts were frozen due to the volume of money being transferred, claiming that these actions are unlawful. They argue that the government is monitoring financial transactions closely, with funds being redirected to cover budget deficits rather than supporting local businesses.
Legal experts consulted by Capital emphasized that while the law allows for income taxation based on authorized rates, there are strict procedures that must be followed. They noted that after an account is frozen due to non-compliance, authorities can only enforce tax collection based on proper assessments and cannot indefinitely hold funds as debts.
Many importers, who wished to remain anonymous for safety reasons, expressed frustration over the lack of transparency regarding new tax regulations. They argued that they should be informed of any legal changes in advance, allowing them to adjust their operations accordingly.
The importers criticized the recent directive from the Ministry of Revenue, claiming it disproportionately targets car importers in Addis Ababa. They argue that the taxes imposed under this directive are unnecessary and unlawful, stating that taxation should be based on established laws rather than arbitrary assessments.
The importers highlighted that while macroeconomic reforms are necessary for economic growth, tax policies should not hinder local businesses or create barriers to competition with international firms.
As the situation unfolds, car importers have reported significant increases in vehicle prices. For example, a standard automobile now costs approximately 1.8 million birr, while a Corolla Cross is priced at 7 million birr. The rising costs are attributed to increased taxes and regulatory burdens imposed on local businesses.
Despite these challenges, importers remain committed to advocating for fair treatment and transparency in tax policies. They emphasize the importance of creating an environment conducive to local business growth rather than one that stifles competition and innovation.
