The Ministry of Revenue with the aim of raising the awareness of the public towards the importance of paying government taxes and induce tax compliance, few months ago, launched a national tax awareness campaign and is executing a number of activities.
As part of the movement, it has carried out a five km run in the capital, Addis Ababa and in some cities of the states. Concurrently, massive awareness raising programs have been carried out through various ways with this same purpose. Strengthening domestic tax collection is a fundamental element of sustainable development strategy.
It plays a key role in the socioeconomic growth of a given country through creating a reliable source of revenue for government to disburse priority areas where needs are most pronounced, deliver efficient services and meet publics’ demands. Further, by allowing sustainable fiscal space for the government, it enables it raise its own revenue and cover public expenditure – provision of education, health infrastructure – by itself instead of depending on foreign aids or grants.
Thus, strengthening domestic tax collection is the best antidote to finance more robust development commitments, relieve poverty and promote inclusive economic development. Ethiopia is one of the countries suffering from dabt distress with budget deficit and national debt. On the other way, it is a country struggling to combat tax evasion, tax avoidance, money laundering and illicit financial flows. Despite great progresses to maximize the revenue collection, the effort it has been exerting is far short of expectations.
The reasons behind this limitation, as said time and again, associated with a number of hurdles including weak institutional capacity and tax administration system, coupled with low commitment to pay taxes at individuals and companies levels. Furthermore, tax evasion and fraud, expansion of contraband, sector’s vulnerability to corruption as well as weak enforcement mechanisms had been distressing the effort.
In fact, over the past few months following Ministry’s tax payment campaigns, encouraging achievements are being witnessed; and the endeavor has given rise to its revenue collection. For instance in the month of February it was enabled to collect 17.8 billion birr which is said a record monthly collection in its history.
Having efficient and effective tax collection system is one of the pillars of an effective state and a means to break out of dependency. It is clear that aids and grants could not be enough and do good to ensure sustainable growth rather than fostering dependency.
Thus, to better mobilize our resources and finance all the expenditures by our own, we have to strengthen a modern and effective tax administration system and government revenue policy that is not exposed to corruption and maladministration.
To this effect, all relevant stakeholders should support Ministry’s support and work together on establishing a fair and efficient system to combat tax evasion and tax avoidance. Above all, realizing that paying tax is the responsibility of all citizens, we all have to develop the culture of paying taxes willingly and accordingly to promote a more inclusive and sustainable growth.
The Ethiopian Herald, May 8/2019
