Will there be justice for tax victims?

Filed under: Opinion & Analysis |

By Zena Abadir Terfassa

In March 2018, Prime Minister Dr. Abiy Ahmed embarked on a political reform agenda unlike any other leader in Ethiopia’s long history.  He ended a long-running State of Emergency, released political prisoners, invited exiled opposition members to return home, removed the suffocating internet blockade and initiated a radical reconciliation with neighboring Eritrea.

These measures earned him the 2019 Noble Peace Prize and heralded a rebirth of freedom for huge numbers of Ethiopians: The opportunity to regain a peaceful life in a more stable region.

It is well-known that the TPLF controlled EPRDF regime was using the ‘anti-everything’ law; specifically, the Anti-terror law to eliminate any form of dissent.

In the then prevailing political and socio economic conditions, the Customs & Revenue Directorate (Ministry) also became an instrument of government’s repression tool to eliminate perceived  and unwanted threats within the country’s business sector. The regime’s repressive laws and far-reaching authorities fueled the growth of a beast: A fifth estate where a handful of people in government could determine, with a stroke of pen,  who the country’s economic winners and losers could be.

Following the 2005 general election, a great many in the business community were thrown into jail on trumped up charges or forced into exile because of their political stance; and for the political views they held.

Since then, and despite a change in government, these instruments and mechanisms of muzzling and repressing the private sector remain in place. Auditing is routinely carried out to fabricate a tax crime and confiscate business assets. Exorbitant  claims and charges are brought to bear on vibrant, highly motivated citizens as a way of putting them out of business. All the while, blatant tax violations are ignored for ‘chosen cohorts’ (This is an admission made by the government itself in the past).

TPLF-lead EPRDF has been well organized to place their own key people in charge. Some of the prominent officials playing the biggest role have included long-serving Intelligence Head Mr. Solomon Gebramlke ; Deputy of the Revenue Authority Mr. Desta Bezabhe; Deputy of Revenue Authority Mr. Gebrewhad W/Giorgise  , and Amha Abaye , head of customs.

An independent study assessing the depth of this problem confirms  key posts in almost all branches of the tax collection and revenue ministry were held by party operatives with deep connections to TPLF-favored individuals

It was customary for Mr. Solomon to select someone for intelligence audits based on political orders made by his god fathers.  Then, after , whoever was selected by that department, the result was to make them vanish from the business world or take them to prison.

Another method used by the Revenue Authority has been to deploy what they call ‘investigative audit.’  This gives them the power to use both crime and capital cases against the business community, often without proper legal reasoning and due process of law.  Further, when they take their victims to the court of law, they make sure that the benches and the judge rule in their favor. At one point they even had their own attorney.

Under the leadership of PM Abiy Ahmed, the current government,  has made many strides and  changes to repressive, nepotist, and corrupt system that prevailed few years ago in order to restore normalcy to the  lives ordinary citizens Ethiopia who were unlawfully victimized by government institutions, the likes of Security Agency, the Attorney General office,  and Federal Police under the pretext of anti-terrorism or corruption law. However, multitudes of victims of TPLF- organized economic warfare in the past have been left out and without their just cases being redressed. There are a huge number of Ethiopians still living in exile for  fear of persecution, several remain in jail, and many others were driven to poverty. There are a good number of entrepreneurs struggling daily with the tax hangovers of the old regime.

Mrs. Adanech Habebe , the Revenue Minister,  is trying to tackle some of the intricate issues and problems passed on by her predecessors. She faces challenge  of restoring public trust, confidence, and respect to her ministry. It is not a hyperbole to state the obvious truism  that the Revenue Ministry been one the most notorious governmental institutions for corruption, nepotism and lack of transparency to the public.

“To me Mrs. Adanech is great; giving me enough time to air out my grievances and injustices. I really considered it as if justice is served. No matter the outcome,” says one interviewee, who prefers to remain anonymous.  He was hopeful for the organization but doubtful there had been any fundamental change, citing outdated TPLF policy as a hindrance to separating politicly motivated tax victims from those who have, indeed, set out to break tax laws.

Obviously, it is impossible to solve these lingering problems within the existing policy framework and regulatory regime.  The consequences of trying to do so are not only wasteful, but also often devastating. “I know people who collapsed on the spot learning of their audit report release, many in jail, many in exile and myself – from 100 million annual turnover I am now living my life dependent on family and friends,” said yet another  interviewee.

Yet a third victim  said: “I have a family member who, after several years of court process, was thrown into jail to serve a three-year sentence for an 85 Birr audit finding only, out of millions of Birr claims.” These  issues have touched all of us in the business community; including those of us who packed up our savings and returned to our country with vision, ambition, new skills in the hope of contributing to the growth of our country and ourselves.

It is extremely frustrating to see propaganda rolled out to attract new investors; rosy slogans about making it ‘easy to do business in Ethiopia’ – while we continue to battle never-ending, nonsensical bureaucratic barriers, nepotism, corruption, and political favoritism.

As many diaspora businesses have pointed out, it is poor governance and tax-related processes which are the biggest hurdles to doing good business in Ethiopia. The challenges stem from a simple lack of information to a confused, random and most times personalized decision-making process.   “I have been going to the Revenue office twice a week for the last three years and have not yet received any final decision on my tax issues. I was told to go here, there and everywhere and back to square one again as no one seems to want to make any decision and get things done right. Since most of the mid-level managers are new appointees, there is a sense of unease and fear of making decisions as they do not either have full authority or are not clear on their own rules and legislations,” said a fourth  businessperson.

There are many businesses who are in such limbo with pending cases, or who have already been forced to close shop  due to lack of decisions. One interviewee stated that his company has several trucks and vehicles that cannot be driven as he was not able to renew the  registration of the business vehicles for the past two years. This is due to his inability to get a tax clearance for his business. He says he is preparing for the worst: To liquidate all his assets at scrap price and leave the country.

While the Addis Ababa government has declared a tax amnesty for businesses (to rightfully correct past mistakes) , the Revenue Ministry has been silent in addressing its pending tax decisions, dragging many businesses through the mud with it. No one can explain why the Ministry and its agencies are not taking stock of their open cases: How many are legitimate? How long these cases have been open?  What is the impact on each business and the overall negative impact on the economy when all these businesses suffer and forced to close.

In this murkiness, corruption not only festers but is being promoted as the only avenue to get things done. It threatens to gut the system as every other person assumes favors for doing their job. Some in the business community are now openly asked for favors and grafts in exchange for leniency and ‘amendments’ to their tax grievances.

We are demanding  Justice from the new Administration! Fairness and  Justice that are long overdue as we remain captive prisoners of a relentless campaign to drive us out of our homes and businesses. Those of us who still have breath left in us are begging.

We urge the government to give special attention to the genuine victims of TPLF’s economic warfare practice of the past so many years  by using the Revenue Authority as an instrument. We believe that the government has ample information to act and redress the unjust practices of the past.

The new  administration must understand that the problem created by TPLF’s Revenue Authority can’t be solved with the existing framework of twisted laws, rules and procedures that are contradictory, inconsistent and prone to many interpretations and manipulations by those who benefit from the previous modus operandi.   Therefore , a high-level political decision is necessary.

The Prosperity Party must prove that a government institution like Revenue will not be a political weapon as the old regime made it to be.  The administration must show determination and excellence in its approach to be just, lawful and principled in all aspects of business governance. If it is going to win the next election, it must start cleaning the mess left to it by those who were at the helm. Only then will it stand apart as a truly reformed and capable servant of the people.

We say it is time to heal the wounds of all the true victims of TPLF on tax issues and business governance in Ethiopia.  Time also to show that the Revenue Ministry is an institution for the people: A body respected by the people for its role in administering income fairly and thoughtfully for the betterment of the Ethiopian people

 This document have been written in the hope of being heard by those concerned. In the hope of giving voice to the  voiceless victims. We write for fear of being not heard and of being persecuted further. Since we have no other means of pointing to the 400-pound gorilla in the room, we have chosen to seek public justice in our plight as businessmen and women, local, foreigners  and diaspora, to get on with our work. That way we can play a significant role in making Ethiopia great and prosperous. 

Zena Abadir Terfassa
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2 Responses to Will there be justice for tax victims?

  1. The previous regime collected tax from few and let others evade tax. The tax evaders were able to stay in business while those that paid full amount of tax were unable to survive since they got no money left to pay the mafia BUREAUCRACY any money , after paying tax as the legal system required them TO.

    MANY ended up joining extremist groups loosing any last hope they have to earn a living legally because the fruit of their labor and their pride of being an honest tax paying citizen was made a mockery of by the system PM HD put to work while he was deputy prime minister ..

    Henock
    February 15, 2020 at 6:24 pm
    Reply

  2. Henock the entire world citizens are victims of tax , cut long story short.

    minilikII diedofsiphilis
    February 28, 2020 at 9:07 am
    Reply

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