As part of the government’s Tax Administration Reform Programme, the Ministry of Revenue has begun the implementation of the SIGTAS (the Integrated Tax System of Ethiopia) software in both the Large Taxpayers Office (LTO) and the Addis Ababa branch office since last month.
 

The programme has also planned to extend the usage of the software in Bahir Dar, Mekele, Nazareth, Awassa, Jimma and Dire Dawa regional offices within the next two months.
 

The new system requires tax payers to fill a form that requests information the SIGTAS software can process. With the new system, tax payers must provide information to the Federal Inland Revenue Authority (FIRA) that includes income, cost of goods sold and business expenses by filling the form.
 

The old system had been using profit and loss statements attached with a balance sheet to determine tax amounts. FIRA Head of MIS, Hailiye Mekonnen, told Fortune that the new system automates the tax collection by creating a favourable tax management system that benefits both the government and the tax payers.
 

The system puts information on the various types of tax owed into a single data base. This, according to Hailiye, helps enforce the use of common measures and standards in addition to helping regional and federal tax authorities share information.
 

Some tax payers, however, seem to be wary of the changes being made. “The tax payer will be burdened with filling the 30 pages of tax declaration requirements,” said a tax payer interviewed by Fortune.
 

FIRA has 12 branch offices. The branches have a Local Area Network (LAN) system that allows them to provide integrated services to their customers. The Ministry of Finance (MoF) financed the 1.4 million Br SIGTAS software project. The software was bought from the Canadian company CRC – Sogema, that provided foreign consultants to get the program up and running.
 

Before the government began the programme, with the support of the IMF and World Bank, Ethiopia used to collect 7.5pc of its GDP in taxes. This number increased to 15pc in 2003/04.
 

The government tax reform programme was launched in 1999. It includes the tax policy legislation project, the TIN (Tax Payer Identification Number) project, the Presumptive Tax Projects (PTP), the Value Added Tax (VAT) project and the Tax Payers Education Project.