Ethiopia’s draft income tax proclamation is said to equip Ethiopian Revenue and Customs Authority (ERCA) with significant powers. The powers are said to be given to the Authority in the aim of expanding its tax collection power.

The draft proclamation, according to Capital, goes as far as allowing ERCA to ban tax payers from overseas travel, if it believes the tax payer owes taxes to the government. Wasihun Abate, Legal Directorate of Ministry of Finance and Economic Cooperation (MoFEC), explained the ban is aimed at preventing tax evasion. “Tax payers, mainly foreigners, leave the country before settling their tax, but this law shall prevent this,” he explained.

If draft bill is approved along with the provision, without a court ruling ERCA will be able to ban tax payers from traveling for up to 14 days. However, before the laps of the 14 days limit the Authority shall take the case to court.

In addition to this, the draft bill allows ERCA to suspend businesses owing tax. This puts the Authority along with
trade offices and health authorities that can suspend businesses.

Another new power that will be given to ERCA is the power to prosecute individuals such as leaders of private limited companies, share companies or other similar type of businesses, if they are suspected of tax evasion.

The draft bill also requires tax advisors to be licensed by the Authority.

According to Capital, the proclamation is expected to be passed by the House of Peoples’ Representative (HPR) before the begning of the next fiscal year.

Source: Capital