Tax Payment Reforms

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Ministry of Revenue has introduced reforms to previous tax payment procedures and protocols keeping in mind customer convenience, administration ease and creating a transparent and digital form of record keeping. The reform focuses on three areas. The reforms include changing the frequency of VAT reporting period for small and medium taxpayers, reducing the VAT refund period, and introducing efficient e-filling for medium taxpayers.

Get your VAT refunds in less than 4 weeks

Proclamation number 1157/2019 stipulates that there is a significant reduction in the VAT refund period. The previous procedure had a 49 week wait period before refunds which has now been reduced to a maximum waiting period of only 4 weeks. The proclamation additionally puts in place a risk-based refund system.

Quarterly VAT Reporting saving time since 2019

Ethiopian Ministry of Revenue has reduced the VAT reporting period of small and medium taxpayers from monthly reporting to quarterly reducing the number of payments from 12 to 4. This amendment is covered under proclamation number 1157/2019 which has been in effect as of 13th August 2019. The amendment includes businesses whose annual turnover is below Ethiopian Birr 70,000,000. The amendment also reduces reporting from 72 hours to 24 hours.

VAT reporting using e-filling

The ministry is working diligently to expand its e-filling system. As of December 2019, the ministry has incorporated 2208 of 4487 of medium taxpayers into the e-filling system. This accounts for 50 percent of total businesses. The e-filling system reduces the time of income tax filling by 50 percent which is significant for customers. 3200 businesses, which account for 70 percent of medium businesses, have been trained on the e-filling process and awareness creation has been done with the aim of reaching 100 percent coverage soon.

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