The issue of taxation and revenue mobilization is one of the most important topics of governments in the world. Taxation offers an antidote to developing countries’ dependence on external loan dependence syndrome. It provides the financial reliance and sustainability needed to promote growth.
Recognizing that, the Ethiopian government has been making various efforts in order to promote tax payment. Last December for instance, National Tax Revenue mobilization events were held in the capital. As PM Abiy Ahmed said on one of the occasions, tax revenue is one of the critical foundations of a country’s civilization and development.
Tax revenues are critical for sustainable development as they are providing governments with independent revenue for investing in development, reducing poverty and delivering public services.
The Prime Minister has also called the public to reprimand such appalling trends of tax evasion and illicit trading to reverse the current low status of tax collection system. More recently, the government especially the Ministry of Revenue has conducted public mobilization schemes with the theme: ‘Ye imiyen le imeye’ (the English equivalent is ‘let your mother get what she deserves’).
As the capacity of the government is measured by its capacity to collect tax, it is common to observe such sort of mobilization endeavors worldwide.
Indeed, how come the government be effective without increasing its tax collection capacity. Over the past years, Ethiopia has been making a stride in increasing in tax collections by putting various rules and regulations. But the country still mobilizes less than 10.7 percent of its GDP in tax revenues, which is also far less than even the Sub-Saharan average.
Notably, without viable tax collection, Ethiopia has currently no other sound alternative to run its wide-range of development projects and programs as the country is struggling with accumulated foreign debt. In addition, how come the country covers the ever increasing cost of expenditure, unless collecting the income tax properly?
From the center to the tip of the country, the people have an endless inquiry of development. Again, how could all these demands be met? Here, it is imperative to work on the mindset of the private sector. Because the expansion of infrastructure will create strong and competent private sector which in turn create plenty of job opportunities for citizens. So, building strong infrastructure must be supported by tax revenue.
Yesterday, Ministry of Revenue announced that it has identified 135 companies involved in 14 billion Birr tax evasion in the last six months. So, in view of this, in addition to the government’s efforts to widen the tax base, implementing an effective ways of controlling tax evasion and contraband is a significant step to be hailed. It has to fill its coffer which has been under heavy pressure due to the public growing demands for public services.
In the mean time the government must also intensify awareness creation and promotion towards taxation. In a country where the tax culture was so weak for years, there is no wonder that most of the people still do not understand as to why they should pay taxes. That is why, more often people claim their rights without discharging their obligation.
It is common that some members of the public tend to evade tax and fraud. The general public, tax evaders included, on the other hand, regularly raise demands for infrastructural development, expansion of educational institutions, other social sector development.
Thus, tax mobilization effort should further be strengthened, among others by controlling tax evasions and frauds through the involvement of the public. There is no other means better than mobilizing the public to control illegal trading and tax evasion.
Taxpayers also should develop a new mind set on tax payment which can demonstrate their true love to their country and family.
The Ethiopian Herald, February 28/2019
