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Ethiopia to Introduce New Tax System for Imports

The Ethiopian Revenue and Customs Authority is to launch a new system to control under invoicing for imported products.

A new computer program designed by Indian tech firm, The Center for Development of Advance Computing, is expected to transform the way the tax authority assesses tax according to sources.

The new system will set prices for imported goods on the basis of transaction costs which will be a better alternative to the not so successfully program currently being used by ERCA to avoid under invoicing. The pilot for the new system will be launched this month according to ERCA officials.

An important feature of the new system will be that it will enable customers to obtain a service evaluation declaration online to clear tax and duty requirements electronically. The new system will be able to modify prices for import items immediately unlike the current system which needs manual revision every three months and which has been open to abuse by importers under declaring imports.

The system also allows importers to declare imports and process their goods without needing to be physically present at ERCA offices.

The system designed for ERCA in a 3.5 million deal with the IT vendor is expected to enable ERCA to come into compliance with the requirements of the World Trade Organization Agreement for Customs Valuation.

The authority hopes to host a range of awareness creating opportunities in relation to the new system as it is fully implemented in the coming months said Melesew Hailemariam, Website Officer for ERCA.

Source: Capital