The two oldest and largest institutions in the country, Commercial Bank of Ethiopia (CBE) and Ethiopian Airline group have launched Co-Branded platinum Card last Wednesday November 6, 2019 at Ethiopian Sky Light Hotel in a bid to serve the shared customers of the two institutions offering a multiple advantage. Ethiopian Airlines transacts through digital payment channels worldwide.
For the last ten months CBE facilitated the sale of Ethiopian Airlines e-tickets worth over 300 million birr through digital payment channels. During the period, 67,480 e-tickets were sold using digital payment channels including its CBE Birr App and online bookings at branches of the Bank.
The digital payment solution is geared towards allowing customers to use CBE’ digital payment channels and flies to over 125 destinations of Ethiopian Airlines worldwide.
The service enables customers to pay at tip of their fingers using mobile phones, Internet, PoS, and CBE birr Ethiopia. 
According to the Tewolde Gebremariam CEO of ET and Bacha Gini President of CBE, customers of the Co- branded platinum card will get a millage advantage from Ethiopian Airline group beside the incentives that the customers get while using the card shopping, at hotels, gas stations and other services.
“We are proud to have pioneered the modernization of payment systems in Ethiopia. The various e-payment facilities we deployed have enabled us become leaders in the provision of technology based banking services,” said Bacha.
“As customer focused global airline, we have invested heavily in digitizing our systems and operations to meet the evolving’ expectation of customers. The digital payment service of CBE has availed us the opportunity to greatly streamline our payment systems and help our customers process their flights at ease, in an efficient and effective manner,” Tewolde adds.
Ethiopian Airlines, one the fastest growing Airlines became one of the continent’s leading carriers, unrivaled in efficiency and operational success in 125 international passenger and cargo destinations across five continents. 
The Airline also works with over 35 digital-payment channels worldwide.
Concerning the network problems encountered at CBE, the president disclosed that they have been using the latest technology to solve the problems.
“For offering such digital services, CBE has assigned a dedicated digitalization structure at the president and vice president level to lead digitalization and go forward,” Bacha adds.
The 77 year old CBE, has over 22 million customers with over 1,500 branches in addition to branches in neighboring South Sudan and Djibouti.
Both giant institutions have shared goals of serving the people and go hand in hand with the global trends.
ET, CBE launch co-branded platinum card
Ministry rules businesses must pay taxes to regions
The Ministry of Revenue (MoR) is defending its latest decision to change the registration of 102 companies some of which are very big, which have invested only in the Oromia region to be registered under their original investment location based on the decision of the House of Federation. The Southern Nation, Nationalities and People’s Region (SNNPR) is demanding that it should benefit from 88 companies that only operate in the region.
A letter issued on October 23 and signed by Adanech Abebe, Minister of Revenue, mentioned that the 102 businesses only operate in Oromia region, even though their head offices are based in Addis Ababa, to be registered under their investment area.
According to the letter of Adanech, the tax identification number (TIN) address should be corrected on the Standard Integrated Government Tax Administration System (SIGTAS) based on the business location.
Mohammed Haso, Tax Harmony and Regions Support head at MoR, told Capital that the current decision came after more than two years of discussion and evaluation of laws as per article 98 of the constitution.
He said that Oromia region has raised the fair tax distribution since early December 2017. The letter signed by Ahmed Tussa, the then head of Oromia Revenue Authority, stated that the region has identified 203 businesses that only operate in Oromia but the region did not get its revenue portion because the companies are registered at the federal government.
An additional two similar letters that have been signed by Chaltu Sani, Director General of the regional tax office and sent to MoR ask for fair tax distribution.
Since then the federal revenue body formed a committee that evaluates the case and identifies the 102 businesses from the 203 that the region claimed only operate in the region but their TIN at the SIGTAS is at the federal tax body.
According to the region’s argument, since the companies are registered at the federal level the region did not get its tax part as other businesses based on the constitution. The region argued that if the companies address is readjusted by their original business area the SIGTAS automatically shall show the tax portion of the region.
Mohammed said that besides the study under the Ministry, the House of Federation has passed its decision on several tax issues between the federal and regional governments including the issue of businesses that are actually located in regions but registered at the federal level that might be at Addis Ababa or Dire Dawa city administrations.
“Due to that we have given the decision,” he added.
“The letter of the Minister does not mean that companies should be registered at the regional tax offices. It said that the TIN address at the SIGTAS should be changed and businesses shall pay their taxes at the federal level, while the regional tax portion will be automatically identified by the SIGTAS since their business addresses is changed for the regions,” Mohammed explained.
Based on the country law companies have to approve the TIN address change and their memo authenticated by authentication office. But the letter stated that until the authentication process is settled the branch office at MoR to change the address for the sake of time.
“Some of the companies have several shareholders and some of them are out of the country due to that the authentication process shall take time and due to that we will change the address until they come within six months’ time,” the letter of Adanech explained.
“We do this because some of the businesses have many shareholders and the authentication process may take time,” Mohammed supported the Minister’s letter.
However, some experts argued that it is against the country’s law and illegal.
In a related issue Mohammed told Capital that SNNP has also raised similar question for MoR that 88 of business in the region are only operating in the region. “So a committee is formed to look their case and identify which companies are operating only in SNNP,” he said.
Article 98 of the constitution states that the federal government and the states shall jointly levy and collect profit, sales, excise and personal income taxes on enterprises they jointly establish. It added that they shall jointly levy and collect taxes on the profits of companies and on dividends due to shareholders, and they shall jointly levy and collect taxes on incomes derived from large-scale mining and all petroleum and gas operations, and royalties on such operations.
Based on the current tax distribution calculation of federal government and regions the income tax would be distributed equally with regions, for VAT, excise tax, and service tax regions shall get 30 percent, and regions shall get 50 percent of shareholders profit tax on the investments in regions. The calculation is approved by the House of Federation. But the calculation will be revised as of the coming budget year. Based on its decision on the meeting held July 5 the tax distribution calculation for regions readjusted as follows; profit tax 50 percent, income (salary) tax 100 percent, VAT, sales and excise tax 50 percent, and shareholders’ profit tax 50 percent.
Greedy traders extorting pea bean business
Traders at the Ethiopian Commodity Exchange (ECX) are saying that a monopoly leading to few players on the trading floor is harming their business.
The traders that Capital interviewed anonymously said that white pea beans are being supplied by only three companies and sent out of the country by one sole exporter.
These traders are buying the bean for export but they say that three suppliers have monopolized white peas. They have taken their supply chain and stretched it to primary marketsin local towns. “Via their brokers at the local markets they collect the product at an extraordinary price which forces other suppliers to leave the business,” they argued. “Currently the daily demand is about 1,100 quintals of white pea beans but the product available on the trading floor is insignificant,” one of the buyers that Capital interviewed said.
“Even though we don’t have information about the product at the ECX warehouse for white pea bean like coffee we are confident that there is a surplus of white peas at the ECX warehouse but the suppliers only make a small amount of product available during the daily session which inflates the prices unreasonably,” a source at the trading floor claimed. He added that on Friday November 8 there were only about 100 quintals of white pea beans available for trading.
They claimed that about four years ago the trading floor been applied a system allowing a single supplier to trade with 50 buyers and farmer unions to supply the product on the trading floor with favorable laws compared with single buyers or sellers. They argued that it was a good system which solved problems in the past. “But few traders organized the farmers under their network and supply the product for sellers as a single client. This is the way to control the primary market that few traders at ECX applied,” they claimed.
Recently the Ministry of Trade and Industry has issued a directive that it would revoke a trading license and sue those exporting agricultural products under the price they bought it at ECX.
“Even though the directive is correct to harmonize the trading and control the price escalation at ECX, at the same time the current monopoly affects our export business,” they claimed.
They said that before the effectiveness of the directive they bought the white pea bean for up to 2,500 birr and exported it for USD 650 per ton.
Currently the price is about 1,900 birr. Sources told Capital that some ECX traders have brought the case to the Ministry of Trade and Industry on Thursday November 7.
Representatives at Ministry of Trade and Industry (MoTI), confirmed that the traders went to the Ministry to express their concerns.
Mesfin Abebe, Director of the Crop Products Marketing Directorate atMoTI, argued that the period is a transitional time from the past season and upcoming harvest due to that the product might not come sufficiently.
He said that is not due to a monopoly by some group of individuals. However, traders claimed that the white pea bean has been sufficiently observed at the ECX warehouse, Mesfin argued that there is a controlling mechanism based on the ECX operation. “ECX has given a maximum period of storage for any product,” he added.
He said that MoTI has applied the controlling mechanism of export price based on the international rate as of October 18. It has shown the price of products at the exchange floor has been reduced.
The export contract registration and administration directive no.21.2019 forced exporters to export their product not lower than the price that they bought it from the local market. It has also ruled MoTI will also evaluate the export documents in addition to banks.
If the exporters move against the rule it will impose a penalty up to revoking the business license.
NetsanetTesfaye, Public Relations head at ECX, said that based on the performance of October the bean supply was very small. “When I looked at the monthly report in my opinion it declined since it is the last period of the past harvest season,” he added.
Mesfin said that in the coming week there is a discussion with regions about hording products against the rules. “We will also look the cases if hording continues in the regions but regarding hording so far there is no problem in this case,” he added.
ASSET PRICE INFLATION
Asset price inflation, particularly in the rich countries of the world system, has become pronounced. Increases in asset prices benefit those who are already well endowed. On the other hand, the mechanisms by which asset prices are systemically forced to go up dispossess the large majority of non-asset owning classes, i.e., the general populace. The main reason asset prices are going through the roof is because of plenty of easy money sloshing around in the system. To be sure, it is the global banking cabal that creates this phony and unearned money. The states via their central banks, sit on top of this criminal scheme. This rigged system works against those who sell their labor, physical or mental!
When the going gets tough, the strategy of the global financial system is to keep on inflating. ‘Inflate or Die’ is the enduring slogan of the money creators. It seems, it is the only thing they have up their sleeve. When the 2007 global financial crisis hit the world economy, the response was to flood the world with more phony/unearned money. To start with, the financial crisis was caused, first and foremost, by the massive accumulation of unsustainable debt permeating the whole global order. The burst initially occurred within the financial sector (Bear Stern, et al). Later on, the crisis manifested in real estate, subprime housing, etc. Instead of accepting market correction of the bubble, which would have been painful, the managers of the global order continued to pump even more money to postpone the day of reckoning. A decade later, the world ended up having ridiculous amount of phony money in circulation, prompting asset price inflation as well as the implementation of useless projects (bridge to nowhere, ghost cities, etc.), which are not commensurate with the logic of capital, i.e., capitalism!
When negative interest rates prevail, the message is clear. It means there is a glut of capital that is not finding its way into productive engagements. Hence, this massive capital, restricted as it were, to the existing universe of activities, props up the value of anything and everything. Housing prices go up, not because there is real effective demand on the ground, but because there is plenty of cheap money around to buy all and sundry. In the highly financialized world of the OECD (rich countries) companies are actually borrowing money to buy back their own shares from the equity market. This is facilitated because the central banks, in their infinite wisdom, have decided to lend massive amount of money with no interest. Share prices in stock markets, pumped up by the massive phony money created out of thin air, are appreciating without bound. Price/Earning (P/E) ratio, which used to signal the values of corporations, is no more relevant to the ‘masters of the universe’, as these crooks are derogatorily called. Entities with no track record of making money are valued in the billions of dollars. Peter Schiff, a well-known financial analyst explained in his latest podcast, ‘the markets aren’t making highs because the economy is good. It’s making highs because of the Federal Reserve’s easy-money policies.’
In the real world where people actually try to make their living, money is hard to come buy. Robotics, Automation, Artificial Intelligence are increasingly encroaching the world of work. Consequently, demand for labor is gradually receding. For example, the Japanese car market crashed by about 25% this year, even though the Japanese state is the number one printer of phony money in the world. For thirty years, the Japanese pumped trillions of (US dollar equivalent) phony money to their system, mostly to save their old relics, the Keiretsu collectives. The old keiretsu (keiretsu is a set of companies with interlocking business relationships and shareholdings) that were trailblazers in global production (in the late 1960s and 70s) gradually became uncompetitive, as a result of many things. It is quite instructive to study the reasons as to why these once formidable industrial juggernauts ended up being mere laggards in the world economy. This lesson is very important to countries like ours that are trying to emulate the East Asian development models. Instead of allowing the market place to clear the deadwoods from the economy, the Japanese politicos decided to bail out the Keiretsu amalgam. In Japan, the Keiretsu still sway massive political power!
To reiterate: All the money that is being pumped into the real global economy (by the central banks/states) ultimately end up pushing asset prices higher. Those parasitic entities connected to the money spigot reap the benefit of free money, while the global masses suffer the consequences, amongst which, spiraling inflation features prominently. Something has to yield. Here is the 18th most cited author of books in the humanities and social sciences in 2007, according to Thomson Reuters database. “…But I also want to argue that the inability to accumulate through expanded reproduction on a sustained basis has been paralleled by a rise in attempts to accumulate by dispossession. This, I then conclude, is the hallmark of what some like to call the new imperialism.” Prof. David Harvey. Good Day!
