The Ethiopian Revenues and Customs Authority discovered millions in unpaid back taxes through its continued investigation of oil companies. Unpaid taxes from Total Ethiopia and National Oil Company have particularly been identified according to sources.

Total has paid 11.9 million birr of the 23.9 million that it was required to pay in unpaid VAT and withholding tax. It is contesting the remaining 12 million birr said sources.  The authority determined the amount it was owed based on payments made for technical services. This is in transgression of the tax law which designates that all payments in consideration of any kind of technical services or expert advice rendered outside of Ethiopia in any form shall be liable to tax at a flat rate of 10pc, which shall be withheld and paid to the tax authority. 

The tax authorities allegedly discovered the unpaid taxes from Total in audits of the company’s books for 2003-2007.

NOC has also paid an estimated 2.6 million in back taxes for VAT and profit tax in August. This amount was established by a thorough audit of its books for 2004-2009 according to the same sources.

ERCA has recently been pursuing many big businesses for unpaid taxes. Amongst these are notices of 210 million to Libya Oil Ethiopia Ltd, 109 million Birr to BGI and 53 million to Bambis Supermarkets. BGI and Bambis have reached administrative settlements and have started paying in installments.

Libya Oil has contested the tax charges and it is anticipated that the case will go to court.

Source: Fortune