Report indicates upsurge in gold being smuggled into the country
Tax and customs officials are awaiting a green light from the Ministry of Finance to write off uncollected taxes and duties from individuals and businesses affected by the northern conflict.
Revenue Minister Aynalem Nigussie and Customs Commissioner Debele Kabeta told MPs this week that billions of Birr in uncollected taxes and duties uncovered by the Office of the Federal Auditor General (OFAG) remain outside of government coffers owing to conflict.
Tax and customs officials had pledged to collect 6.5 billion Birr in outstanding taxes and 2.3 billion Birr in unpaid duties over the last four months, but reported to Parliament this week they had managed to recover only a small portion of the outstanding balance.
In response to lawmakers’ questions, tax officials said a portion of the uncollected revenue stemmed from damages and losses suffered by businesses during the northern conflict.
“There are several individuals and businesses who were affected during the conflict that took place in the Amhara and Tigray regions. Their properties have been damaged and lost. They could not pay taxes and duties. We audited them and presented our findings to the Ministry of Finance. Of course, the amount is reported as receivables in the OFAG findings. The damages are justified and have evidence. So we presented it to the Ministry and relevant bodies to pass a decision on them. Once the decision is made, it will be out of the audit findings,” Debele told Parliament.
The other uncollected receivables arise from the social development tax, according to the Commissioner.
“There are also other receivables that should be addressed through write offs. We have been working on this too with the Ministry. For instance, the social development tax has been audited and there are huge outstanding uncollected receivables, which we are neither able to collect nor write off,” he said.
Debele told lawmakers the Ministry recently decided to write off the interest and penalties on this tax, while the principal will be paid off over an extended period.
“We are enforcing the decision now. It is a significant sum as reported in the attorney general’s findings,” added Debele, responding to the MPs’ inquiry.
The performance report presented to Parliament indicated that tax officials have seized a large volume of contraband over the past four months.
Officials at the Ministry and Commission seized contraband items valued at 5.6 billion Birr, more than double the figure from the same period last year. Textiles and garments accounted for 1.1 billion Birr, while 1.1 billion Birr’s worth of pharmaceutical products and nearly one billion in electronics were seized.
The report reveals that customs officials intercepted 680 million Birr’s worth of smuggled gold, highlighting the growing illicit gold trade in the country. Among the seizures was a 27 kilogram gold bar intercepted while being smuggled into Ethiopia, corroborating earlier reports that gold is now being smuggled into the country rather than out.
The authorities also reported seizing 520 million Birr’s worth of outgoing illicit commodities, most of which were agricultural.
MPs asked why the volume of contraband flowing into the country has grown, while illicit trade moving out has fallen. Officials attributed it to an improvement in capacity to intercept and seize contraband items.
