Premier stresses need for enhanced tax collection to unlock Ethiopia’s dev’t potential

Addis Ababa, May 16, 2024 (FBC) – President of Prosperity Party (PP) and the incumbent Prime Minister of Ethiopia Abiy Ahmed emphasized the need to implement a modernized tax collection and administration system that is well-suited to the evolving times with a view to boosting Ethiopia’s revenue, citing the country’s untapped potential and growing demands.

Prosperity Party Executive Committee recently evaluated the nine month performances of national development, peace and political activities of the country in Gorgora, Amhara Region.

On the occasion, the ruling party’s president Abiy Ahmed delivered detailed briefings about the overall development activities.

He revealed that the revenue from taxes and duties had increased from 324 billion birr to 374 billion birr in the nine months of the 2015 and 2016 fiscal years, respectively.

He noted that common revenue has increased to 54 billion Birr in the 2016 fiscal year from 42 billion Birr during the previous year stating that the overall revenue still fell short of the nation’s capabilities and needs.

Prime Minister Abiy urged revenue sector institutions to adopt modern strategies and technology-driven systems to combat tax evasion and fraud, while expanding the tax base and investing in projects that would secure prosperity for future generations.

Underscoring Ethiopia’s immense economic potential, Prime Minister Abiy Ahmed asserted that if the government can effectively manage to double the current revenue, it would unlock the ability to undertake numerous transformative projects that will benefit future generations and realize the country’s prosperity.

To this end, the prime minister urged the revenue sector institutions to fulfill their responsibilities more diligently, focusing on preventing tax evasion and fraud.

He stressed the necessity of adopting a tax collection and management system that is well-suited to the evolving times.

Recognizing the need for a forward-looking approach, Prime Minister Abiy emphasized the importance of strengthening the operational strategy, one that is driven by technology and aligned with the demands of the present era.

Ms. Aynalem Neguse, a member of the party’s Executive Committee and the Minister of Revenues, noted that domestic revenue and tax collection have been on a growth trajectory, even during the challenging periods in the past few years, following a series of reforms.

The minister underscored that enhancing the performance of the revenue sector is crucial to achieving the national vision of prosperity set forth by the ruling party and the government.

However, she acknowledged that although the collected income is growing, the country’s development capacity and its share in the national product remain limited.

To address this, Aynalem stated that efforts will be exerted on strengthening technology-assisted tax collection and administration, as well as expanding the tax base.

The minister recognized that illegality and smuggling pose significant challenges in the revenue collection process and pledged to establish a digital system to better control contraband movement while also reinforcing border control measures, as reported by ENA.