AmCham Hosted a Forum on Ethiopian Tax System
AmCham Ethiopia hosted its Executive Breakfast Forum on May 26, 2022, at the Hyatt Regency Hotel Addis Ababa. The forum was organized with the focus of discussing the challenges and opportunities of Ethiopian Tax system in relation to the business community. The forum provided a platform for the subject matter experts and the participants to share from the wealth of their knowledge. AmCham member companies’ representatives and other invited participants utilized this opportunity to gain experience the benefits that the tax system provides for their business and to discuss ways to mitigate the overall challenge of the system that impacts their business operation. Panelists included tax & audit experts and policymakers from the FDRE Ministry of Revenue, FDRE Ministry of Finance, FDRE Investment Commission and RSM Consulting PLC.
Daryl Wilson, AmCham’s Board President, and Managing Director to East Africa Bottling S.C., stated in his welcoming speech that Tax policies are one of the significant matters for the business community as it is a complicated and have legal and financial ramification on any economic system. He added that a forum like this one is a way to engage both the business executives and the policy matters to discuss the issue at hand, identify and address any shortcomings, and find ways to work on areas that needs improvements.
US Ambassador to Ethiopia, Her Excellency Tracey Ann Jacobson, in her opening remark, reiterated that the US will continue its engagement with the Ethiopian Government and the business community to provide any relevant support. She recalled that the bilateral relationship between the U.S. and Ethiopia has been affected due to the pandemic and conflicts in the country and expressed her hope that the economic partnerships like AGOA will be restored with the fulfilment of key principles such as a sustained peace process, access to humanitarian assistance, and respect for human rights.
Some of the topics that were discussed on the forum includes the need of the Government agencies to clearly understand the international business practices, transfer pricing, and other related issues. It was also stated that it is essential to modernize the tax administration, create practice transparency, and develop competent staff to allow businesses to have fair and accessible taxation. The forum also highlighted that the foreign investors face several problems with the tax assessment, which is resulted in decreases Ethiopia’s ability to receive more Foreign Direct Investment. It is necessary to as part of AmCham effort to make sure such forums are outcome focused, it established a relationship between the members and the tax experts so that the business community members can bring their tax related issue so that they can garner expert advice on and resolution.
The participants brought their concern to the panelists regarding the customs pricing procedures with imports, Tax law transparency, income tax holidays and the subject matter experts answered the questions, clarified misunderstanding of the law, and provide insights on how to mitigate challenges associated with the tax system. The panelists cited the lack of and overdue in updating business laws as the cause of many loopholes. Industry comparison making it challenging to create standards for a company’s operational departments. It was also stated that modernization is underway to improve the taxation system concerning foreign exchange loss, imports, loss carried forward, and other relevant matters. It was a consensus of both the panelists and the participants of the forum that there should be a consistent effort and resources to solving the grievances and understanding the real challenges of the business community and tackling any outstanding issues in a consistent and timely manner.