Addis Chamber, June 13, 2024:
This is divulged during the high profile panel discussion held in Addis Ababa. Dubbed as “The Impact of Tax System and its Implication on Private Sector”, the panel brought together key stakeholders from business communities, officials from federal and regional tax authorities, academic institutes, and independent consultants among others.
In his remark to the gathering, Shibeshi Bettemariam, Secretary General of Addis Chamber, underlines that the diverse challenges linked with taxation is rolling till now unabated.
Thus Addis Chamber will persist to host such kinds of dialogue forum until such challenges are resolved through policy measures.
In her welcoming address to the gathering, Mesenbet Shenkute, President of Addis Chamber, reiterates taxation as one of the serious challenges to harm doing business environment in Ethiopia that needs to be addressed sooner than later.
Reminding the role of business communities for job creation, GDP growth and macro-economic development, yet taxation laws and legal frameworks and the entire taxation system don’t consider private sector and tax payers at all, said the president, thus calling for the need to engage business communities while formulating laws and procedures in the future.
Following those opening remarks, the conference brought and shared challenges and, current taxation reform programs as well as recommendations to yield conducive taxation system in Ethiopia.
Among those raised concerns of taxation include the steadily growing volume of taxation both at federal and regional levels, yet tax to GDP ratio remains low during the last five years.
Panelists also highlighted the current endeavor to take policy measures on tax reform however it is suggested that vibrant institutions, sound strategy and taking measures such as enhancing the tax base to support the national economy.
Besides to these, panelists also finds out the failure to take tax reform measures that considers the dynamic economic environment, and inability to control the flow of goods and money circulating in the informal economy and the exposure of tax offices to corruption remained to be major challenges of the taxation system in Ethiopia.
During the panel, property and excise tax were discussed widely where major challenges and recommendations were put forward from discussants.
Concerning the former, no reforms were taken for the last 48 years signaling how such kinds of taxations are neglected.
Some of the major concerns include inefficient property registration mechanisms, lack of integration with concerned bodies, tedious tax compliance system, and absence of tax payer’s charter among others.
Theme on Excise tax, panelists shared the pros and cons of excise tax implementation in Ethiopia.
Unlike other taxes, review was made on excise tax twice during the last four years were rated as commendable however such amendments shouldn’t encourage illicit business rather it needs to encourage local producers against importers to promote employment opportunities and GDP growth.
Panelists and attendees of the conference also put forward recommendations to rescue the current taxation system including the need to support agriculture that contributes huge role for GDP growth, using new technology in taxation system and introducing mechanisms to combat corruption.
In addition to these, tax system need to embed accountable and transparent legal frameworks to combat tax evasion and corruption.
In concluding it was learnt that Addis Chamber to go on hosting such kinds of policy advocacy gatherings to influence policy decisions to yield conducive business environment that can support national development and proud tax payers.