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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Ethiopia to Battle Trade Misinvoicing

Monday, January 04, 2016 > 12:02:18
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(All Africa)

Ethiopia is battling to stop the outflows of billions of dollars every year through trade misinvoicing in collaboration with foreign partners, the country's tax authority official said.

"As of last year, we are working hard to combat the practice, especially the under-invoicing by importers and local traders," Sisay Baharu, Director of Planning and Performance Follow-up at the Ethiopian Customs and Revenue Authority (ERCA), said commenting on Global Financial Intelligence's (GFI's) report, which stated that close to two billion dollars on average is leaving the country every year through trade misinvoicing.

Out of the total of close to 26 billion dollars left Ethiopia as illicit financial flows in ten years (2004-2013), about $19.7billion is left the country through trade misinvoicing, mainly by importers, according to GFI report released this month.

"In collaboration with Indian customs and excise, last year we have replaced the old system and established new custom data base, which is linked to global price makers and update itself automatically. In addition, we are also identifying the major importers in the country to do close follow up with our intelligence unit. We have also plan to continue using the public to inform us about such tax frauds and get paid up to 10% of the recovered stolen tax money," he said.

Mr. Sisay also noted that the support from the International Monetary Fund (IMF) and Tax-Audit Transparency program by Her Majesty Revenue and Customs (HMRC) of British is also expected to enhance Ethiopia's fight against illicit financial flows, which is now eating 5-10% of its GDP. Ethiopia's total income including tax, loan and aid has been growing by around 30% annually on average over the past five years reaching close to $9.1 billion in the last fiscal year (2014/15). Meanwhile the country's tax to GDP ratio still remains below 15% of the Sub Saharan Africa (SSA) average. Currently Ethiopia's tax to GDP ratio is 13% as the tax authority was unable to achieve its target of bringing it up to at least to the SSA average (15%).

Ethiopia is battling to stop the outflows of billions of dollars every year through trade misinvoicing in collaboration with foreign partners, the country's tax authority official said.

"As of last year, we are working hard to combat the practice, especially the under-invoicing by importers and local traders," Sisay Baharu, Director of Planning and Performance Follow-up at the Ethiopian Customs and Revenue Authority (ERCA), said commenting on Global Financial Intelligence's (GFI's) report, which stated that close to two billion dollars on average is leaving the country every year through trade misinvoicing.

Out of the total of close to 26 billion dollars left Ethiopia as illicit financial flows in ten years (2004-2013), about $19.7billion is left the country through trade misinvoicing, mainly by importers, according to GFI report released this month.

"In collaboration with Indian customs and excise, last year we have replaced the old system and established new custom data base, which is linked to global price makers and update itself automatically. In addition, we are also identifying the major importers in the country to do close follow up with our intelligence unit. We have also plan to continue using the public to inform us about such tax frauds and get paid up to 10% of the recovered stolen tax money," he said.

Mr. Sisay also noted that the support from the International Monetary Fund (IMF) and Tax-Audit Transparency program by Her Majesty Revenue and Customs (HMRC) of British is also expected to enhance Ethiopia's fight against illicit financial flows, which is now eating 5-10% of its GDP. Ethiopia's total income including tax, loan and aid has been growing by around 30% annually on average over the past five years reaching close to $9.1 billion in the last fiscal year (2014/15). Meanwhile the country's tax to GDP ratio still remains below 15% of the Sub Saharan Africa (SSA) average. Currently Ethiopia's tax to GDP ratio is 13% as the tax authority was unable to achieve its target of bringing it up to at least to the SSA average (15%).


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