ERCA may increase Value Added Tax withholding : Capital





By Muluken Yewondwossen
Capital
Published on December 22,2016

Right ERCA -minister Source: capital
Right ERCA -minister
Source: capital

The growing number of requests for tax refunds is causing the government to consider increasing the withholding percentage from Value Added Tax (VAT). In the first four months of the budget year over 2.6 billion birr was slated to be refunded. There have been so many refund requests that companies have been complaining about delays in receiving them.

During the latest meeting with high tax payers, Ethiopian Revenue and Customs Authority (ERCA) officials said there have been significant increases in the amount of tax refund requests. Desta Bezabeh, Deputy Director for Inland Revenue of ERCA, said that ERCA has been assessing the reason for the increasing number, especially over the past few months.

According to a document that Capital obtained, in the first four months of the budget year over 2.6 billion birr was slated for refund. In the first four months of the budget year net collections after tax refunds and other transfers amounted to 53 billion birr.

During October ERCA allocated 887 million birr for tax refunds, according to its monthly performance. Experts said that this amount is much larger than the preceding period. That month ERCA was able to collect over 18.7 billion birr in revenue. Over 4.7 percent of that amount has been set aside for tax refunds.

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