In its recent campaign, the Addis Ababa City Tax Authority has detained four wholesalers of ceramics, granite and bathroom accessories for tax evasion.
Tamrat Nigusse, deputy director of the authority heading the tax law enforcement division, told reporters on Thursday that the apprehended business persons and employees were caught red-handed while trying to evade taxation from the sales of products.
According to the deputy director, the companies have been under surveillance for about a month until they were caught processing product sales valued at 100,000 birr with out issuing receipts.
Those companies have shown a registered three to seven million birr annual transactions. During the operation, two owners and eight employees have been detained and formal criminal investigations are underway.
A few days ago, similar undercover operations have been carried out on reinforcement bar wholesalers, resulting in the detention of three wholesalers. These three altogether were found to be registering some 70 million birr in annual transactions.
According to Tamrat, during the past nine months of the current fiscal year, 1439 individual and business taxpayers have been identified as tax evaders. For that, the authority has penalized the tax evaders with 71.5 million birr in accordance to the tax administrative measures. Criminal charges have also been filed against the defendants. According to the tax law, a tax offence carries a punishment of both criminal and administrative measures. Hence, a financial fine of up to 50,000 birr as an administrative measure is imposed on each transaction undertaken without the issuance of receipts. Meanwhile,the criminal aspect of such offenses carries three to five years of imprisonment and a 25,000 birr fine.
According to the authority, some 10 percent of the city's indirect taxes are believed to be dodged every year. The targeted tax revenue for the current fiscal year was 34.5 billion birr and so far, in nine months, 25.4 billion birr has been collected. Out of that, some 7.2 billion is the share of indirect taxes that includes the likes of Turn-Over Tax and Value Added Tax (VAT).