Ethiopian Business Review

Ethiopia’s Major Tax Revenue Sources in 2011/12 Featured

Ethiopia’s Major Tax Revenue Sources in 2011/12

Ethiopia’s Major Tax Revenue Sources in 2011/12
Source:ERCA
Illustration by EBR

The Ethiopian Revenue and Customs Authority’s achievement in collecting an aggregate of 70.7 billion birr in 2011/12 is 39.22 per cent higher than the previous year, and almost 93 per cent of its stretched plan for 76.3 billion birr. However, the government expected ERCA to collect 70 billion birr for the year. From what it was supposed to collect as per the plan of its supervisors, ERCA’s achievement was above target.

The last fiscal year month to month performance of the Authority was stable, except the anticipated huge growth of revenue in October and June. This is not strange since these two months are the time for companies to pay their profit taxes. Last year, after recording total monthly revenue of 4.8 billion birr in September, the revenue reached 10.6 billion birr in October. This is more than twice the revenue collected in September.

Monthly revenue collection by sector 2011/12

Monthly revenue collection by sector 2011/12
Source:ERCA
Illustration by EBR

There were also expected revenue rises in the foreign trade section. Though traders import goods from abroad throughout the year, right before holidays, revenue from foreign trade increases. In 2011/12, the foreign trade revenue increased in August (before the Ethiopian New Year), November (before the Ethiopian Christmas) and April (before Ethiopian Easter).

According to the first two months (July and August) of the 2012/13 performance, the authority collected over 16 billion birr, over 12 per cent higher than the 14.7 billion target. This came at a time foreign trade has been in dire shortage in the country, seriously effecting foreign trade performance, hence revenue from custom.

From the total revenue collected, domestic tax took the lion share of 56.75 per cent (9.36) billion birr, while foreign trade tax and duty constitutes 43.14 per cent (7.11) billion birr and net profit form lottery sales took the balance. This shows that the authority kept its upward move in generating sustainable revenue for the government.

ERCA has a plan to collect an aggregate of 101.53 billion birr at the end of the current fiscal period.

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