Ethiopia Rakes in Over 640 Billion Birr in Taxes Amid Crackdown on Evasion and Illicit Trade. Ethiopia’s Ministry of Revenue has reported a significant upswing in tax collections, signaling intensified enforcement efforts and improved compliance measures in the country’s tax system.
In a statement released by the Ministry, the East African nation recorded 649 billion birr in tax revenue during the first nine months of the current Ethiopian fiscal year. This reflects a year-on-year increase of 279 billion birr, or 74 percent, when compared to the same period last year.
According to the breakdown provided, domestic tax sources accounted for 345.9 billion birr, while 307.2 billion birr was generated from foreign trade taxes, including import duties and related levies.
Though the Ministry did not elaborate on the exact factors driving the sharp increase in tax receipts, it emphasized that ongoing reforms and enhanced tax administration may have contributed to the positive figures.
Despite this revenue growth, tax authorities acknowledged persistent obstacles affecting the efficiency of tax collection. The Ministry highlighted tax evasion, unrecorded transactions, smuggling, and use of fake invoices as key threats to the country’s fiscal health.
To address these concerns, the government has intensified audits and enforcement actions.
A total of 7,583 financial records were subjected to audits during the review period. These audits revealed over 60 billion birr in unpaid taxes by government-linked and private entities.
Additionally, 641 organizations were placed under investigation for suspected tax fraud. Of this number, 235 entities were found to have used fake purchase invoices amounting to 3.4 billion birr.
In a more alarming case, 19 organizations were discovered to have hidden over 5 billion birr in taxable income.
As part of enforcement actions, 597 individuals were arrested for conducting business without issuing official invoices. Their cases are currently being prosecuted under criminal charges.
The Ministry further noted that 584 firms were audited and ordered to pay a combined 25.8 billion birr in outstanding taxes, which includes applicable interests and penalties.
Also, 26.2 billion birr was recovered from firms that had falsely declared business losses to evade taxes. The Ministry said that 2.6 billion birr in tax refunds was also withheld from companies that made fraudulent claims.
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Ethiopia Rakes in Over 640 Billion Birr in Taxes: Other Concerns
Another major concern remains the influx of contraband goods. In just nine months, the government confiscated smuggled items valued at 15.6 billion birr, underscoring the scale of illegal trade and its implications for revenue mobilization.
While the figures point to an improved tax revenue outlook for Ethiopia, experts suggest that curbing illicit financial flows and ensuring voluntary compliance remain key to sustaining growth and achieving long-term fiscal stability.
