– Ethiopia evaluates Chamber’s recommendations
ADDIS ABABA – The European Chamber issued yesterday a Policy brief titled ‘Enhancing Tax Administration’ that advocated reformed tax environment to address the EU private sector’s challenges in Ethiopia.
During his keynote address, EU Ambassador to Ethiopia Roland Kobia emphasized that the policy brief benefits not only EU companies but also international and domestic firms by alleviating challenges they have faced so far.
Ambassador Kobia also underscored the issue of tax unpredictability as a significant obstacle for EU investors in Ethiopia, along with security concerns.
The document proposes recommendations to address tax-related issues, with a particular emphasis on improving predictability, addressing misinterpretation of laws, and enhancing auditing procedures for corporations, he elaborated.
“Notably, the policy brief highlights key challenges arising from inconsistencies in tax directives issued by various government agencies, including the Ministry of Finance, Ministry of Revenues, and the Ethiopian Investment Commission. These inconsistencies have resulted in confusion for taxpayers.”
Additionally, repetitive audits and inconsistent assessment techniques have led to unpredictable outcomes in tax cases.
The Ethiopian Investment Commissioner Hanna Areyaselassie stated in a media briefing that the commission is working towards resolving the challenges faced by domestic and foreign investors by engaging with various government agencies.
According to the commissioner, the investors’ concerns are being addressed both immediately and gradually. “Immediate solutions are sought through negotiations with federal and state stakeholders, while long-term problems require sustained efforts.”
Regarding the policy briefs and recommendations, Hanna explained that they are evaluated in alignment with government policy. Over the past five years, significant improvements have been made to facilitate the ease of doing business in the country that makes Ethiopia a preferred investment destination in Africa.
“The Policy Brief advocates for a reformed tax environment in Ethiopia. To achieve this, close collaboration between the Ministry of Finance and relevant agencies is essential to ensure the issuance of clear and consistent tax directives.”
The commissioner further highlighted that standardized audit programs, accompanied by industry-specific manuals, are crucial, and auditors should receive comprehensive training.
Involving taxpayers in shaping standards that accurately reflect industry realities and implementing a system that ranks taxpayers based on their compliance and provides fast-track services would further strengthen the tax administration system, she remarked.
BY EYUEL KIFLU
THE ETHIOPIAN HERALD FRIDAY 26 APRIL 2024
