Ethiopia introduces electronic tax payment system

As part of modernizing its services, the Ministry of Revenue of Ethiopia is set to fully collect tax from large tax payers using electronic payment system.

The e-tax payment system has been tested for about a year as pilot by 11 companies, is expected to go fully operational soon. The e-tax payment has been tested on the system of Commercial Bank of Ethiopia, the state financial institution which has over half market share of the baking business in Ethiopia.

Mega state enterprises will soon start paying their taxes using electronic system, according to the state broadcaster – ETV report.

Currently there are 770 large tax payers in Ethiopia representing 70% of the total tax income of the country. One of the large tax payers in Ethiopia is Ethio Telecom, has used the e-tax system to pay 4.1 billion birr (…) in the first six months of Ethiopia’s fiscal year started July 8, 2018.

“Out of this amount we paid 70% using the new electronic tax system,” said Asegid Ayele, chief financial officer of Ethio Telecom.

In the past few years, the tax authority has also been implementing electronic tax reporting and filing of documents with large tax payers. The e-tax payment is the extension of that, according to the report.

In a related development, the Ministry of Revenue said it has collected 7.58 billion birr (about $268 million) tax in one month – January 2019. At the end of this Ethiopia fiscal year, the ministry has set an ambitious target of collecting around 319 billion birr ($11.3 billion, which is almost twice the amount it has actually collected last year.