Ethiopia Country Profile
Tax Administration
Individual Corruption
The tax revenue services are perceived by citizens to constitute the most corrupt institution in Ethiopia, according to Transparency International's Global Corruption Barometer 2005. In addition, citizens interviewed in the Transparency Ethiopia Corruption Diagnostic Baseline Survey 2009 report that tax procedures are an area where bribes are often needed, with the average bribe being ETB 400.
Business Corruption
According to Global Integrity 2008, tax laws are sometimes enforced arbitrarily. For instance, some groups, such as companies owned by the ruling party and government officials, are consistently favoured. This makes business almost impossible to conduct for independent companies, according to the source. Global Integrity 2010 further states that, according to some private sector businessmen, civil servants within the tax collection agency are corrupt and that some pay higher taxes than other. The Revenue and Customs Authority (RCA) has identified ETB 4.5 billion worth of unpaid taxes and blacklisted 171 taxpayers for evasion. However, tax evasion remains a problem. In a similar vein, business executives surveyed in the World Economic Forum Global Competitiveness Report 2011-2012 rank tax regulation in Ethiopia as a problematic factor for doing business in the country. In sum, the Ethiopian tax system is generally considered to be non-transparent and prone to corruption.
Frequency
The World Bank & IFC: Doing Business 2012:
- A company spends an average of 198 hours per year making 19 separate tax payments at a total tax rate of 31.1% of profits.
The World Bank & IFC: Enterprise Surveys 2006:
- 4.5% of companies are expected to give gifts when meeting with tax inspectors.
UNECA: African Governance Report 2005:
- 42% of respondents in this expert-opinion survey state that the tax system is rarely or never transparent.
- 73% of experts responded that the tax collection system is mostly or always affected by corruption.
