PROBLEMS WITH THE ‘GENEROUS DIRECTIVE’: DIRECTIVE REMITTING TAX LIABILITIES TO REDUCE DAMAGE CAUSED BY COVID-19 ON TAXPAYERS

Part of the Ethiopian government’s actions to reduce Covid-19’s effect on the economy is the recently issued directive to remit tax liabilities of taxpayers number 64/2020 (the “Directive”). This directive was issued by the Ministry of Finance pursuant to the mandate bestowed to it by the Federal Tax Administration Proclamation Number 983/2016. The purpose of the directive is to reduce the damage caused by Covid-19 on taxpayers. And, the tax liabilities subject to remission are tax liabilities of before and during 2018.

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A Brief Note on Ethiopia’s Tax Privileges to ease the Impact of Covid-19

The outbreak of the COVID-19 pandemic has brought overall economic, political and social crisis in most parts of the world, including Ethiopia. Although there are criticisms on their effectiveness, the government of Ethiopia has been taking measures to ease the economic impact of COVID-19 on the business entities operating in the country. Earlier in April, a protocol was issued by the Ministry of Labor and Social Affairs cited as the COVID-19 Workplace Response Protocol, which regulates the relationship between employees and employees during the COVID-19 pandemic. This protocol was a subject of criticisms due to its silence on the obligation and role of the government in sharing the burdens of employers.  

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