A new autonomous tax commission, given authority to hear grievances and appeals from businesses, has begun operations.
The Tax Appellate Commission takes over the duties from the dissolved tax council under the Office of the Attorney General.
Prime Minster Abiy Ahmed (PhD), to whom the Commission will directly report, appointed Mulugeta Ayalew as its head. Five members have also been nominated as members of the new commission and are awaiting confirmation by the Prime Minister.
“The main reason for the formation of the commission is the unresolved pile of complaints and inefficient service delivered by the previous council,” Mulugeta, who has served as chairman of the Tax Appellate Council under the Office of the Attorney General since 2015, said.
The Commission had a backlog of 334 complaints to settle even before it began its work.
Unlike the previous Council, which met to examine tax files once a week, the Commission will be open during regular business hours.
The Commission’s office is located at the Ethiopia Revenue & Customs Authority’s headquarters on Equatorial Guinea Street.
Experts argue that while its formation is commendable, its independence remains arguable.
“It may not serve impartially while residing in the Tax Authority’s compound,” said Yohannes Woldegebriel, an expert with extensive experience in commercial and legal laws.
“It must also succeed in bringing in people with significant experience and exposure to the country’s tax system to be successful,” he argued.
Mulugeta understands the concern.
“We have taken precautions to ensure that our members have no relations with the Authority,” he said.
The board members can only serve for three years and two consecutive terms.
The Commission has to settle complaints within 120 days and issue the decision letter within seven days of the final decision.
Businesses for their part are bound by law to present their complaints within a month and can take their cases to the Federal High Court if they do not agree with the Commission’s decision.
Complaints from federal taxpayers have increased over the years, from 41 in 2014 to 344 in the past fiscal year.
“The main reason for the increase in recent years was the lifting of the interest taxes,” according to Mulugeta.
The proclamation stated that if the taxpayer lost the case, payment will not include interest for delay.
“We expect to efficiently engage once we have all our members in place,” Mulugeta said.
The Commission is finalising the human resource structure and budget proposal to send to the Ministry of Civil Service for approval.
“Based on the complaints in different parts of the region, we may consider opening branch offices to increase our accessibility,” Mulugeta said.
The Tax Authority, which has been witnessing increasing complaints from different categories of taxpayers, has tried to mitigate the problem by cancelling 65 days from annual taxing days and establishing new tax collection offices.
It plans to mobilise 235.7 billion Br from domestic tax revenues this fiscal year.
“If we cannot address the issues in our tax administration system and capacity, we would be challenged in using the budget as we planned,” Abraham Tekeste (PhD), minister of Finance & Economic Cooperation, told parliament when it tabled the 346.9 billion Br federal budget.