Bambis Supermarket has paid the Ethiopian Revenues
and Customs Authority (ERCA) around 19 million Br in
its first instalment of paying back taxes amounting
to 53 million Br, after being accused of tax
Bambis Supermarket had paid 35.8pc of what it owes
in back taxes as part of a deal it made with the
ERCA. The authority requires a payment of at least
25pc as a first instalment, after which the amount
can be paid on a monthly basis.
“We paid the first instalment to offset what we
would have to pay, given the high interest rates,”
Bambis Tsimas, 80, the managing director of the
supermarket, told Fortune by telephone from South
Africa where he undergoing medical treatment.
Prompted by a tipoff from informants, the authority
started investigating the company, in October 2010.
A comprehensive audit on its books between 2005 and
2010 revealed that the company had been duplicating
a Goods Receivable Note (GRN) for five consecutive
years, resulting in its underpaying taxes in the
amount of 2.4 million Br, according to the audit
report. Undeclared sales and exaggerated general and
administrative costs were also investigated.
In December last year, the authority declared that
the company owed a total of 91 million Br, of which
28.3 million Br was for VAT and 62.7 million Br for
Bambis appealed to the general director of the ERCA
to reduce the amount and asked for a six-year grace
period in which to complete the payment.
A tax payer who owes tax above two million Birr and
agreed to settle it administratively must pay it
within 18 months, according to a directive of the
authority. However, the tax payer may request extra
time if he cannot pay the amount in the given period
due to force majeure or the lack of capacity; this
period cannot exceed three years, the directive
“Given the company’s track record and the amount of
money involved, the authority has reduced the
penalties and ruled that the company owes only 53
million Br,” Asfawossen Aleneh, general manager of
the large taxpayers’ office (LTO) at the ERCA, told
Fortune. “The request for an additional year was
rejected as it requires an amendment to the
Over the past two years, the ERCA has collected
around 400 million Br as a direct result of received
tips. It has paid a total of 33 million Br in
rewards during that time to informants and people
who have aided in the seizure of contraband and
illegal items. The largest payment was made to an
individual who tipped off the authority about the
attempted smuggling of 47kg of gold out of the
country, through Djibouti, in August 2010.
A new directive on the rewards of informants was
issued by the ERCA in January, setting the
percentage paid to informants at 20pc of the total
recovered by the authority, while previously their
compensation depended on the amount the ERCA
recovered as a result of the tip.
An informant should be paid when the authority
collects the amount due, according to the previous
directive, which was in effect at the time of the
information being shared with the tax authority.
The two informants, of whom one was an employee of
the supermarket, are in negotiations with the LTO
about whether their rewards will be paid in
accordance with the new or previous proclamation,
sources who were not authorised to comment,
disclosed to Fortune.