Economy
Traders Blame Tax Assessment Disputes for Business Closures in Addis
Capital Ethiopia · 3 hours ago · Read the Full Story on Capital Ethiopia
AI SUMMARY
Small business owners in Addis Ababa report that disputed tax assessments and VAT registration requirements are forcing some traders to close their shops, while the city's Revenues Bureau maintains its procedures are fair and appealable.
- Small businesses in Addis Ababa claim disputed tax assessments and compulsory VAT registration concerns are forcing traders to close their shops.
- Business owners report that estimated sales figures exceed actual receipts, compounding financial pressures from rising operating costs, commercial rents, and narrow profit margins.
- Three former business owners confirmed they closed their businesses after failing to meet newly assessed tax obligations while still facing lease liabilities.
- The Addis Ababa City Administration Revenues Bureau rejected claims of indiscriminate VAT registration, stating that decisions are based on committee sales assessments and allow for taxpayer appeals.
- Concerns are particularly pronounced among small businesses selling mobile accessories, stationery, construction materials, clothing, and general consumer goods.
- Traders argue that assessment methods fail to reflect differences in location, customer traffic, inventory turnover, and operating costs.
- Sewnet Ayele, communications director at the Revenues Bureau, stated that VAT registration targets 13 commercial sectors and is determined by sales volume rather than profit.
- The criteria apply to businesses assessed with daily sales of 7,000 birr or more, corresponding to an annual turnover of approximately two million birr or above.
- Taxpayers who disagree with an assessment can submit a formal appeal to their respective sub-city administrations for a reassessment by a second team before a VAT certificate is issued.
- The bureau introduced digital tax administration services and issued a document outlining special declaration arrangements and adjusted calculation methods for certain Category A and Category B taxpayers.
- Revenue officials warned that deliberate underreporting or tax evasion can lead to administrative penalties and criminal proceedings, with penalties reaching up to 200 percent of the tax liability.
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