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NEWS/POLITICS
Federation blocks disbursement of war-era taxes to Tigray

By: Ashenafi Endale

https://www.thereporterethiopia.com/34438/

June 3, 2023

– In a disputed Letter, house declares Tigray’s share starts post peace deal

– Tigray officials say denying revenue violates peace deal terms

The Tigray region is ineligible to receive its portion of concurrent taxes collected during the war, according to the House of Federation.

Officials strongly criticized the federal government for withholding hundred millions in tax revenue owed to the region, dealing a major setback to regional efforts to mobilize resources for recovery from the two year war that ravaged Tigray.

In a letter to the Ministry of Revenue, the House, led by its speaker Agegnehu Teshager, said Tigray is only eligible to share tax revenues beginning from the date the Ministry of Finance started disbursing the region’s budget, which was a few months ago.

The taxes mainly come from companies based or operating in Tigray.

The federal government collects profit taxes and other direct and indirect taxes from these companies, and revenue is annually divided between federal and regional governments using the House’s formula.

Tigray did not receive its fair share of funding from the federal government over the past three years, Amanuel Assefa, chief cabinet secretary of the Tigray Interim Administration, said.

The Administration, formed after the Pretoria peace deal and led by Getachew Reda, its president, requested the federal government disburse the region’s share of tax revenue for the past three years.

However, the House’s letter said Tigray is ineligible to receive the tax revenue it missed during the past three years.

The letter states disbursement of tax revenue should only begin after normalization and from the day the Ministry of Finance began releasing the budget to Tigray.

Amanuel explained that

the House’s letter concludes that Tigray did not deserve the tax as it was not considered part of the federation in the past two and a half years.

However, it is actually the Tigray people who are members of the federation, not the region itself. Tigray was not outside the federation, so the Tigray people have the right to those benefits. We requested disbursement of the shared tax revenues for the past three years, but the House speaker wrote a letter blocking it,

he said.

Amanuel does not believe such letters were written in good faith.

Revenue sharing is a constitutional issue, and the House does not have the mandate to determine it. It should be straightforward to give Tigray its fair share calculated based on the House’s formula.

He says the budget for Tigray resumed a few months ago following the Pretoria agreement.

Revenue sharing for Tigray has nothing to do with the resumption of the budget,

he added.

Amanuel states that share companies have been paying billions in concurrent taxes to the federal government annually. The House’s letter has now blocked Tigray from getting its fair share of the direct and indirect taxes that Tigrayan share companies have been paying, he claims.

This money could have been used to rebuild schools, health centers, and other essential services,

he said, emphasizing that this money belongs to the public, not the TPLF.

Officials of the House of Federation did not respond to requests for comment from The Reporter.

Apart from the tax revenue issue, officials of the TIA say that the pension funds and properties of EFFORT have also not been returned yet. Over 100,000 public and private employees in Tigray have not received their pension funds since the war broke out.

Amanuel says they have also requested the federal government return the properties of EFFORT.

Officials at the Ministry of Finance have given us positive signals that both the pensions and EFFORT properties will be returned soon. However, regarding the Tigray People’s Liberation Front (TPLF) party license from the National Electoral Board of Ethiopia (NEBE), we did not receive a good response,

he added.

This, according to him, violates the good faith and principle of the Pretoria agreement.

It is against the constitution and the spirit of the Pretoria agreement. It indicates that some federal institutions are still not implementing the agreement, especially the House of Federation and NEBE,

Amanuel concluded.

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