No Tax Debt to Be Cancelled in Ethiopia

AA-The government has no intentions to cancel tax debts owed by businesses and it would rather continue to take serious measures against those who fail to settle their dues, the Customs and Inland Authority said refuting assumptions debts would be cancelled due to upcoming elections.

The authority said it would be naive to think the ruling EPRDF would like all debts cancelled as a means to win votes in the elections early next year.

“We don’t compromise anything in enforcing rule and regulation to pay tax,” Director General Melaku Fanta told a press conference at his office on Thursday.

Melaku said there were several people running their businesses despite huge tax overdues.

He said the authority will keep on forcing people to pay their tax and would carry out legal action against tax evaders.

According to the Director General, his authority, in collaboration with the Addis Ababa City administration, has so far registered over 1,500 VAT payers and aims to extend the figure to 10,000 before the end of this fiscal year.

Under the country’s tax system or law any one engaged in particular commercial business and whose transaction is greater than 500,000 Birr has to be registered as VAT payer.
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Moving to Insurance Companies, Melaku noted that a common consensus was reached with the companies who have debt to pay their debt in one year.

The seven insurance companies have a total of 36 million birr debt in connection with vehicles that has not been taxed.

According to him, based on their agreement, these companies are paying initially 25% and will pay all debts in one year.

Documents obtained from the authority show that seven private companies and one government insurance companies have been registered with high amount of debt.

Accordingly, United Insurance is owed with 22.6 million birr, Nib Insurance 4.8 million, Nile 2.97 million, Nyala 1.37 million Birr, Awash 2.95 million Birr, Global 907,000 birr, Africa 800,000 Birr and Ethiopian Insurance Corporation 319,275 Birr.

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