Ethiopia: Merkato businesses claim Revenues and Customs Authority (ERCA) is overtaxing their profits

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The traders complained that the tax on their business is inconsistent and similar businesses are being asked to pay different taxes.

“All shops are conducting their businesses with cash register machines as required by ERCA and the machines record all of the business transactions for the year so ERCA should base the tax on that amount,” the traders claimed adding that they are being requested to pay more than the amount registered on the machines.

“But the Authority is now imposing an additional tax other than the profits registered by the cash register machines,” the business community complained.

Traders who are classified as class three taxpayers are the ones who have the most complaints about the issue.

These businesses say that for the past few years they have been using the cash register machines, which ERCA requires every shop based in Merkato to use.

One of the main reasons (ERCA) imposed the use of cash machines is to know the traders’ daily transactions. But the traders complained that the tax imposed by ERCA is more than the transactions registered by their machines.

About six years ago the Authority introduced the cash register machine to the capital city. At that time a limited number of businesses were included in the use of cash machine, which was applied to stop tax evasion and avoid requesting a higher tax rate. Currently, the scheme covers almost all businesses, except very small ones, in every region.

The number of cash register machines, which register all transactions in ERCA’s central server, has been and will continue to grow.

By Muluken Yewondwossen, CapitalEthiopia