ethiopiantimes

September 26, 2011

Tax Authority Shells Out Millions for Tips

Filed under: Ethiopia — ethiopiantimes @ 8:43 pm
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source addis Fortune

A total of 53.5 million Br was paid By the Ethiopian Revenues and Customs Authority (ERCA) as a reward to informants who tipped them off about tax fraud and led to seizure of contraband and illegal items.

ERCA, which collected 51 billion Br last year, received 2189 tips from informants, out of which 1611 were considered reliable, and of which 87o led to real information. Based on the information given, the authority was able to conduct investigative audits and pass decisions for payments.

The amount paid out last year, was 61.1pc more than the 33 million it paid out the previous year. Back then, the highest amount, 2.5 million Br, was paid to an informant who gave information about an individual who tried to smuggle 46.96kg of gold worth of 5.7 million Br out of the country through Djibouti.

The highest amounts in 2010/11 fiscal year, 10 million and 7.6 million Br, were paid through the Dire Dawa and Jijiga tax offices, mainly for information that led to confiscation of contraband items.

During that period the authority confiscated different commodities, including live animals like Cheetahs, being smuggled out of the country, according to the performance report of the tax authority. These were worth a total of 208 million Br, out of which were 3.2 million Br and 1.1 million dollars, which were seized while being taken out of the country.

Two informants, of whom one was an employee of Bambis Supermarket, which has been accused of tax evasion of 91 million in back taxes and later reduced to million Br, are among the highest paid informants. The company used one Goods Receivable Note (GRN) which it duplicated for five consecutive years for the commission of fraud, according to the authority.

The two informants of BGI Ethiopia, the biggest of the five breweries, who provided information about the underreporting of the sales volume amounting to 109 million Br, are also among the highest paid to date. They were rewarded 1.4 million.

However, the informants have sued the authority claiming an additional 4.4 million Br. The authority alleges that the informants did not come up with concrete information that led to the discovery of the evasion. The case is being heard in the Federal High Court.

Though informants have different motives when they bring information to ERCA, the amount of money awarded is a major factor for attracting them, an official at the intelligence department who is not authorized to comment told Fortune.

Previously, ERCA varied the percentage of payment depending on the amount of money discovered as a result of a tip. It has now changed this to a 20pc flat rate for any amount as of January, 2011.

The reward for information in the investigation of Oil Libya is expected to be highest ever paid to an informant. The tax authority claims that Oil Libya owes 210 million Br in back taxes for the acquisition of shares from Shell Ethiopia Limited in 2008. The informant will be rewarded around 41 million Br, if the ERCA collects on its claim.

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