By Bruck Shewareged

The House of Peoples' Representatives discussed a bill to establish the Ethiopian Revenue and Customs Authority. The bill calls for the dismantling of the Ministry of Revenue (MoR), which was established in late 2001. Not only the ministry, the two authorities, i.e., the customs and inland revenue authorities will also cease to exist as separate entities and now will become one.

Revenue collection in Ethiopia has long been beset with a myriad of problems for a long time. For decades, the two authorities were operating independently. The government, with the hope of facilitating better revenue collection, created the ministry and put these two authorities under the ministry. Apart from the two authorities, the National Lottery is also accountable to the ministry.

Even though the ministry came into existence in 2001, it has been unable to effectively accomplish the result that was expected of it. Now the government has deemed it necessary to merge the different federal revenue collecting institutions into a single revenue collecting agency to improve the efficiency of the sector, according to the bill.

The government seems to acknowledge the duplication of the revenue collecting institutions. The Ministry of Revenues and the customs and inland revenue authorities are all involved in similar task - the collection of taxes. But due to lack of efficient coordination and duplication of responsibilities, they could not efficiently carry out the very task they were entrusted with, the government argues.

With the merging of these institutions into one entity, it is hoped that more efficient service can be rendered. The experiences of other countries show that by unifying these institutions, governments can collect better revenue. Before writing the draft law, the cases of England, South Africa, Kenya, Uganda and Tanzania have been studied.

The new authority will be directly accountable to the prime minister. Many hope that close monitoring, and support from the prime minister will enable the institution to efficiently caury out its task.

The Authority will have a director-general and deputy director-generals who will be appointed by the government. The director general will appoint prosecutors.

The Authority's objectives include, inter alia, establishing modern revenue assessment and collection system, enforcing tax and customs laws by preventing and controlling contraband and tax fraud  and evasion and providing support to regional authorities with a view to harmonizing federal and regional tax administration system.

The administration of the staff of the new authority will be outside of the civil service law. The reason given for this is that since workers of such revenue collection institution need to be strictly disciplined and highly professional that they cannot be administered like the rest of the civil servants.

The soon-to-be-set-up authority will have an advisory board, too. The board will advise the director general on policy and strategic issue. Since the authority will be engaged in daily activities, it is feared that it may not consider outside factors affecting its work will in advance. The board will fill the gap, according to the explanatory notes of the draft proclamation.

Members of the advisory board will be appointed by the director-general from different sectors, including government institutions, private sector and professional associations. The director-general will chair the board. The explanatory notes state that such an advisory board had been in work in England and proven to be effective.

The draft proclamation also envisages the establishment of special benches that exclusively deal with cases related to tax and customs issue. The experience so far has shown that tax related cases have been prolonged unnecessarily when they were processed in a regular court. In order to expedite prosecution cases, these special benches will be established, and judges will be given special trainings on tax related issues.

The Authority will have much more power in enforcing tax related laws. Formerly, tax authorities had no legal power to prosecute. That power belongs to the Ministry of Justice. The ministry used to delegate power of prosecution to tax authorities on tax related cases.

But the new authority will have the legal authority. Article 16 of the draft proclamation reads, "The power of investigation and prosecution given to the Federal Police and federal prosecutors under the criminal procedure code and other laws are hereby given to the Authority's Investigators and prosecutors regarding customs and tax offences."

The Federal Police meanwhile has been entrusted with the task of organizing and deploying police force to prevent criminal offences committed in violation of customs and tax laws. It will control contraband activities, defect and apprehend suspects to bring them to justice, accompany customs transit goods and vehicles directed to their destiny and so on.

If, as anticipated in the draft proclamation, the new Ethiopia Revenue and Customs Authority is established, it will have substantial powers. The institution will also have huge manpower as it will have the combined man power of three institutions.