The Addis Ababa Revenue Bureau has enacted a new directive restricting the power of branch offices to freeze taxpayer bank accounts without authorization from its head office — a move aimed at curbing arbitrary actions that have long disrupted business operations.
The reform follows years of complaints from businesses that mid-level officials and auditors were freezing accounts without prior notice, often over minor accounting discrepancies. Entrepreneurs said the practice had crippled operations, preventing them from paying staff salaries, suppliers, and customs obligations.
Addressing participants at a recent consultation forum with “exemplary taxpayers,” Biniam Mekru, Head of the Addis Ababa Revenue Bureau, acknowledged that the system had been misused.
“We understand that suspending bank accounts based on personal decisions by auditors or minor accounting errors has caused undue economic damage,” he said.
Under the new circular, the power to suspend accounts now rests solely with the Bureau’s head office. Branch offices must submit detailed documentation and evidence demonstrating a taxpayer’s noncompliance before such action can be taken. Account freezes will only occur after senior management reviews the case and confirms that all alternative collection measures have been exhausted.
During the forum, traders also raised enduring grievances about the Bureau’s market research process used to assess product values and prevent under-invoicing. Importers argued that the Bureau’s price study fails to reflect differences in product quality, brand, and technical specifications — resulting in inflated tax burdens on lower-grade goods.
Officials confirmed that the database once covered only 2,000 to 3,000 products but has since expanded to more than 16,000 items.
“The market research was initially based on high-quality products, which affected traders importing lower-grade goods,” Biniam conceded. “However, if importers present evidence showing their goods differ from the base price, adjustments will be made case by case.”
Business owners further cited persistent issues with overlapping audits under the International Financial Reporting Standards (IFRS), which many firms have struggled to implement. Those operating across the Addis Ababa and Oromia jurisdictions said they were often summoned for simultaneous audits by both regional tax offices.
Others complained about on-the-spot inspections conducted during goods transportation from warehouses to shops, even when they carried valid receipts and warehouse documentation.
“When we have every legal document in place, our work is still interrupted by suspicion,” one trader said.
In response, the Bureau pledged to adopt technology-assisted auditing systems integrated with modern enterprise resource planning (ERP) tools to minimize unnecessary manual interventions.
Despite being recognized through the Bureau’s “Gold-Level Trustworthy Taxpayer” award, several businesses said they continued to face unprofessional treatment from lower-level auditors.
“We’re rewarded for loyalty, but when we go to the tax office, we’re treated with suspicion. That discourages us from staying compliant,” one businessman remarked.
In closing, the Bureau announced the launch of dedicated Telegram communication channels for large and medium taxpayers to receive real-time updates on new directives and policy changes. The digital communication platforms aim to bridge information gaps that often lead to penalties and misunderstandings.
By tightening internal controls and addressing taxpayer grievances, the Addis Ababa Revenue Bureau says it hopes to balance enforcement with fairness—protecting law-abiding businesses while ensuring compliance within the city’s growing economy.
