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Addis property taxes cause uproar in the business community

Members of the business community oppose the newly revised house tax applied by the Addis Ababa city administration citing gaps in the implementation and rate adjustment.
In light of the situation, the Addis Ababa Chamber of Commerce and Sectoral Association (AACCSA) held a meeting on June 22, 2023 with the presence of members of the business community and representatives of city administration revenue bureau and Addis Ababa property tax coordination office to deliberate on the issue.
As Mesenbet Shenkute, president of the AACCSA states, taxes are a backbone for the development of cities and it is necessary to consult and involve all the relevant stakeholders both before and after the issuance of proclamations and regulations related to taxation.
The Addis Ababa city administration applied the infamous revised house tax rate in April 2023, to which members of the business community at the time lamented that the reform was inconsiderate of the current economic status of the country.
The business community underscored that the rate adjustment was not clear and for some was higher than the rent rate. Participants argued that the city administration didn’t delve into the negative outcomes of the decision. Looking past the living situation of the society and not consulting the resident or all stakeholders, was also deemed by the business community as being negligent by the authority.

(Photo: Anteneh Aklilu)

To make a sense out of this, Adem Nuri, head of the city administration revenue bureau gave a presentation at the discussion. As he highlighted, the decree in use was issued in 1968 and was known as an urban land rent and house tax 47/68. As the revenue head clarified, there was a gap in updating the rate since the one on hand did not consider condominiums, villas and real estates that did not exist at the time, “We did just a simple rate reform.”
As Adem explained the former rate was insignificant, “It was not possible to collect taxes that keep pace with the growth of the city and the current lack of infrastructure needs and growth.”
As he indicated, in the previous proclamation, 96 percent of the residence of the city paid less than 500 birr in house tax. “Now, when the property tax regulation is amended, this house tax will be included under the property tax regulation,” he elaborated.
The city administration is planning to generate 5 billion birr from house tax per year.
In a legal observation presented by Yohannes W.Gebriel, Director of the Arbitration Institute at the Chamber argued that proclamation no.47/1968 was amended by the Derg regime to go with the communist ideology. As he showed, rather than revising the whole proclamation the city administration revised only the rating method combining both the communist and the current market lead ideology just to full fill the income shortage which is dangerous.
“This is law breaking,” the legal director underlined.
The head of Addis Ababa property tax coordinating office, Asmamaw Mulugeta on his part stated that the house tax distribution was updated based on value of the current rate of the house rent market, the kind of the house, width, services and area level.
As he put across, there are more than 185,000 tax payers in the city, and the tax collected in the city when compare to other countries is low, “Nairobi’s house tax is 20 percent of the total tax while Lusaka the capital of Zambia collects 74 percent. However, Addis Ababa collects less than 1 percent.’’
The investment consultant, Yared Hailemeskel said that the reform of the house tax rate was ill-timed and could create socio economic crises arguing against the adjustment.
“Citizens who can’t afford to pay will get exempted from payment for one year if they can confirm that they can’t afford it,” said the head of the revenue bureau, in response to financial drawbacks.
According to the bureau, government offices, non-government organizations, embassies, religious places are said to be free from the tax.
“It is clear that since the system has not been revised for several years, it may cause a lot of dissatisfaction and confusion when it is implemented. Therefore it would be appropriate to work on creating awareness before the tax payer commits to breaking the law,” said Asmamaw, indicating, “Based on decree no.80/1968 which stipulates that if the taxpayers has a complaint they can go until the criminal code and if they are found breaking the law they will punished based on the criminal code and will pay a penalty of 5 percent of the tax each month for a delay which will be implement accordingly.”

SNV, BASF partner to boost small holder farmers in Tigray, Amhara

Four thousand four hundred farmers in East Amhara and Tigray are set to benefit from high-quality seeds that will enable them to produce15 million kg of onions as part of SNV’s Farmer Field Schools, Conflict Recovery Program.
SNV which partnered with BASF for this particular project is said to receive high quality red onion seeds, to which it will then distribute to small holders farmers in conflict and drought affected areas, through its Horti-LIFE program that works with the Ministry of Agriculture on establishing Farmer Field Schools (FFS).
This week, BASF handed over to SNV the high quality onion seeds to which each participating family will receive seeds for 0.1hectare of onions allowing them to restart production in the conflict and drought affected areas. The produce is said to be primarily for home consumption, and will allow farming families to restart their livelihoods. The collaboration between SNV and BASF will enable the farmers to produce in total 15 million kilograms of onions thereby increasing the supply to local rural markets.
To make this happen, BASF is offering Nunhems®Santire F1 onion seeds to SNV Ethiopia who will distribute the seeds free of charge to farmers in Tigray and East Amhara. On top of offering the seeds, BASF, as part of its social engagement, has doubled its efforts by donating the same amount of seeds for free to the SNV Farmer Field School program.
“We’re not only active in the vegetable seeds business in Ethiopia, but also strongly committed to the communities and society with different social engagement activities,” said Ben Depraetere, Managing Director of BASF’s vegetable seeds business in Ethiopia.
“We are proud to work together with SNV and join forces to support thousands of small holder farming families in the North of Ethiopia allowing them to restart their livelihoods,” BASF’s MD explained.
“SNV likes to acknowledge the very generous contribution of BASF. We know their seeds to be of high quality due to our cooperation on Zonal Variety Demonstrations that we organize every year with all horticultural seed importers. The seeds fit very well in our Horti-LIFE program that has been promoting horticultural hybrid seeds via FFS,” explained Julie Graham, SNV Ethiopia Country Director.
Since 2016 SNV has worked with the Ethiopian Ministry of Agriculture to establish the FFS. Its members over the years have learnt about Good Agricultural Practices by observing and discussing the impact of an innovation package (of seeds, fertilizers, pesticides, and other technologies) that is piloted on small learning plots inside the regular fields of elected lead farmers. This has accordingly enabled the farmers to improve their productivity.
As survey in 2021 showed, FFS members got 34% higher yields, and 43% higher incomes. In concrete numbers: Farmer Field Schools, members earn US$ 545 more from 0.6 ha. At present SNV-Horti-LIFE operates in 81 woredas (districts) reaching 40, 000 farmers per year via 1,300 FFS.

CONSOLIDATING THE HORN

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The Horn primarily consists of Ethiopia, Eritrea, Djibouti and Somalia. Current attempt by these countries to establish a more coherent strategy of peace and stability in the region is to be welcomed. Realistically speaking however, the project of meaningful consolidation, with binding political and economic ties, might well require ‘political will’ of unprecedented scale, at least by the measure of past experience!
The project of consolidation, most likely, will end up being more protracted and rife with thorny issues than anticipated. Nonetheless, the very exercise towards the objective is bound to build confidence amongst member states and their peoples. The movement of peoples, at least in the nearby border areas, remains critical in bringing harmonious existence to the innately affiliated communities residing in the various neighboring states. In this regard, what transpired between Eritrea and Ethiopia is a very positive steppingstone. Be that as it may, the most important questions remain: What are the critical shared values that can serve as reliable building blocks of the Horn’s project of a consolidated edifice? Also, how are these values to be transmitted and maintained across these lands of diversity? First and foremost, critical values that have effectively served as gluing bonds elsewhere, need to be carefully studied by all concerned, most of all, by aspiring political parties and politicos. We can mention the revered values of justice and equity as starting points. We do not want to emphasis the particular vehicles on which these lofty ideas are loaded. For example, EPRDF’s very reason to wage war against the previous government was to fight ‘injustice and inequity’. This rationale gradually faded away as absolute power was absolutely secured by the front. What came as a result of this absolute, hence abusive power was; nepotism, grand political corruption, Mafiosi State and its ‘daylight hyenas’, distortion of justice, etc., etc.!
Democratic dispensations and their attendant institutions can go a long way in thwarting off the above criminality and illegality. Unfortunately, EPRDF was not seriously interested in ushering entities and collectives that were ready to democratically challenge its power. Being on top might have led it to believe that it was the only one ordained to bring ‘justice and equity’ to the Ethiopian sheeple! But the fact is; EPRDF has been decaying from the inside for years. The organization didn’t want to initiate serious reforms until it was too late. By the time the sheeple started its rebellion the credibility of the party was lost, almost completely. It is another sad episode of modern Ethiopian history borne of greed and malfeasance! As a result of such phenomena potentially repeating themselves, we do not want to emphasis or dwell on the formal political agents (parties, political actors and actresses) who continuously advocate for justice and equity, only to undermine these same values once in power! Therefore, to bring genuine consolidation to the Horn, we need to look at new institutions outside of the state, per force, to deliberate, discuss, debate, and even decide on important issues emanating from interactions of various groupings that inhabit the Horn! Don’t forget, we also have the problems of outside interference. By and large, many of our states are weak and compromised, hence do not have the guts to say ‘no’ to the wicked maneuverings of the global power that be!
On the economic front, there has to be clear and measurable (tangible) activities to gauge the development of the Horn. The useless GDP, which has given rise to the superficial growth of the ‘Africa Rising’ genre must be deconstructed and openly discarded! Digging a hole, the size of Addis and filling it up with the same excavated soil add tremendously to the GDP nonsense, even though not an iota of wellbeing and wealth to the sheeple is accrued! In fact, many of our so-called development projects are nothing more than sinks of precious material and human resources! Agriculture (including animal husbandry) which remains the backbone of Africa must be looked at, not only as a source of surplus accumulation, but as a desirable way of life that is realistically available to the large majority of the sheeple. Obviously, making it a desirable way of life will remain a serious challenge, but it is worth pursuing. Unmanageable Megacities and the resultant outcomes (social ills, environmental degradation, etc.) are not appetizing in many fronts, to say the least! Moreover, the industrialization of old, might well have exhausted its stay. In addition, we should realize that it is not possible to have a life like that of a Westerners for all Africa. For that to happen, we need to have the resources of another seven earth-like planets. This is simply an impossibility to all rational thinkers. This can only be achievable in the la la land of ‘Alice in Wonderland’!
Neoliberalism is an ideology where the market takes precedent over everything, including life itself. Hence, might not be compatible with many of the organic human values traditional societies still uphold. In this regard, it is important to emphasize the ideological differences of parties or even aspiring political leaders that want to be active within the horn. For instance and by and large, the horn’s Diaspora hail from the west and tends to lack visible balance when it comes to economic analysis. This must be countered by critical thoughts capable of deciphering the actual operations of the globally dominant economic system, particularly as it operates on the grounds of Africa, Asia and South America. Here we should give due credence to Samir Amin, Africa’s preeminent son, who fully dedicated his life to the task of elaborating the workings, as well as maliciousness of the existing economic order, as it imposes itself on the global South. Unequal exchange, dependency and underdevelopment are all the manifestation of the existing world system. Samir’s theory of ‘Eurocentrism’ has become mainstream now. We are grateful to Samir Amin and colleagues for their lucid expose of the above crucial elements of the world system. We will devote our next editorial to the life of this African giant of heart and mind! In light of the above prognosis, the gullibility and naiveté that comes with the territory of the Diaspora must be interrogated and debated openly! Hiding behind useless learning with plenty of phony credentials will not do (‘Ivy Idiots’ in our parlance and ‘Intellectuals yet Idiots’, in the words of Nassim Nicholas Taleb, of ‘Black Swan’ fame) especially in the twilight of the modern word system, which has yet to bring wholesome emancipation to the African sheeple! Here is an observation and also a statement of fact by an American critic. ‘Almost all of the world is capitalist, and almost all of the world’s people are poor.’ Michael Parenti.
The Horn needs its own organic intellectuals to articulate these and other issues of interest. Not only do we want our elites to relearn about global reality, but we also need them to be enlightened about all and sundry! Green and sustainable development should not be taken lightly or as a mere gimmick, as is the case in the so-called developed countries. We should remind ourselves that it is the result of undermining of our own history that gave us the useless and absolutely stupid war between the same people who just happened to be in two different superficial jurisdictions. Have we had meaningful conflict resolution mechanisms between the two peoples, outside of the state, we could have, most likely, avoided the atrocious war instigated by the states. The Horn should learn that narrow mindedness and obsessing with identity politics only encourage a hateful and belligerent mind set, as witnessed during those days of lunacy (Ethio-Eritrea war). Jingoism is another malice to avoid.

This was first published in August 2018