Ministry of Revenue has announced recently that it will collect 213 billion birr tax revenue expected from this budget year.
However, the Ministry has also indicated that, some factors like political instability and unrest in the country could be strangleholds to hit the set target. Regarding to tax collection problems and other gaps, the Ministry has indicated the detection of 50 billion birr deficit during the past fiscal year.
Revenue Minister, Adanech Abebe, told journalists recently that after the Ministry reformed itself, several measures are being taken. Policy adjustment and other measures are expected to bridge the noted gaps. Among actions that the government is taking, creating delegations that deal with tax-related issue is the salient one.
They are flexing their muscles to tackle tasks. Ministry of Revenue, Ministry of Trade and Industry, Ministry of Finance, National Bank of Ethiopia and National Plan Commission and other stakeholders are member of this delegation. The newly organized Ministry has also prepared and launched a new national awareness creation movement which will keep going for one year under the theme of “Delivering on my responsibility! Demanding my right!” The issue of tax is not something that should be left for the government alone.
It is the responsibility of each and every citizen. Ethiopia is striving to secure the tax system in a better way. As it was recently mentioned by Prime Minister Dr. Abiy Ahmed, tax payers should change their mindset about tax payment and consider it as a responsibility through which they can show their love for their country. According to him, Ethiopia’s tax collection rate is about 10.7 percent, which is lower than that of other Sub-Saharan countries.
But if stakeholders practically act in the spirit of responsibility, things will go on unhampered. Lately, The Ethiopian Herald had approached scholars to hear their reflection on how the government can translate the expected plan with the current nation’s situation and also what will be the opportunities and challenges. Assistance Professor of Economics, Teshome Adugna, said that it is possible to collect the needed tax from the people with the existing spirit.
But extra effort is needed from the government and the public. When one assesses the national economy, the slackening of the tax collection capacity of the country becomes palpable. When we look at GTP I and GTPII, the national economy has showed progress. Transactions have increased. Also wealth rates have been displaying an upward swing. But income tax is spiraling down, he added. As to him, this effect shows that there is structural gap on tax collection system and there is poor public awareness in the area.
“Whenever there is robust tax paying culture within the nation, there is always a strong government. However, if the culture of paying tax is poor the reverse will turn out to be true,” he added. Dr. Teke Alemu is another economist at A.A.U. According to him, peace and stable political conditions are the bedrocks for smooth functioning of the economy. He said that the people are aware of the significance of tax to build the economy. But they do not have sufficient profit and income to cover their basic needs.
Under this condition they find it difficult to pay their taxes. The government’s move towards creating awareness on tax is a good start, but it should also focus on other perspectives. It has to enable the people to get more income. Then tax collection system will be easy. Macro Economist, Tekilebirihan Gebiremichael on his part said, tax payers have been negatively affected by political situation of the nation.
As a result, there is an apathy towards paying tax. Tekleberehan said that “The government has showed great interest to create awareness among the public. This is a good start. The current movement will re-compensate the nation in the future. The result may not be tangible immediately. But, in the future, everyone will realize that. ” All scholars have agreed that the current movement of the government is encouraging. However, the issue of peace and stability is capitalized by almost all scholars. In an effort towards building strong nation, the role of tax is gargantuan.
Without it, the nation cannot move a single step. Paying tax is not only a responsibility it is also a manifestation of one’s integrity and loyalty to one’s nation. Whosoever loves his nation will pay all the necessary scarifies. Paying tax is the least in this regard. Here, it must be taken into account that the political instability of the nation dampens the mood of most tax payers. In this respect the government has to also focus on the security issues, irrigated by collected taxes.
The Ethiopian Herald, January 13/2019
BY GENET FEKADE
