About Us

According to article 3 of the proclamation No .587/2008, the Authority is looked upon as "an autonomous federal agency having its own legal personality". The Authority came into existence on 14 July 2008, by the merger of the Ministry of Revenue, Ethiopian Customs Authority and The Federal Inland Revenue Authority who formerly were responsible to raise revenue for the Federal government and to prevent contraband. Reasons for the merge of the foregoing administrations into a single autonomous Authority are varied and complex.
Some of those reasons include:
To provide the basis for modern tax and customs administrations
To cut through the red tape or avoid unnecessary and redundant procedures that results delay and are considered cost-inefficient etc.
To be much more effective and efficient in keeping and utilizing information, promoting law and order,resource utilization and service delivery
To transform the efficiency of the revenue sector to a high level.
A long process of study called "Business Process Re-engineering" had taken place before any steps were taken to effect the merger of the foregoing administrations. The study was undertaken for a year and half beginning from November 2007 by teams of officials selected from within the administration.

The study has looked into the selected key business processes and has come across inefficient organizational structure and unnecessary complicated procedures that permitted insufficient service delivery. The study has also indicated that there was corruption within the administrations and that smuggling and tax evasion were serious problems. These problems have depressed the attempt of the foregoing administrations to be successful in achieving their objectives. Owing to the depressing problems that worked against efficiency, the former administration has failed to deliver efficient service to its customers such as importers, exporters, taxpayers, the federal government, the society etc. For instance, international trade participants (importers, exporters) were unable to deliver their goods to domestic and international market on time.

Every import or export goods and their documents must be processed through the former tax and customs administration and due to the inefficient procedures, these goods were subject to delay at exit or entry points of the former customs Authority. Owing to it, importers or exporters viewed the former customs procedure with disfavor or as an impediment that blocked the movement of international trade. The former tax and customs administration also has long been criticized for lack of efficient system to control tax evasion.

The administration had inefficient system to control taxpayers who fail to declare their actual income in order to reduce their tax bill and the federal government's revenue. The former administration was also far behind in protecting investors from adverse effects of contraband. It was a daily occurrence to see contraband goods displayed on and being sold in the streets of major towns of the country. These and other myriad problems call for solutions or significant change and in response to them, the study team has made problem-solving proposal.
In its proposal, the team has suggested merger of the foregoing three administrations. The team could not see the necessity for three entities or administrations as long as their purposes are indistinguishable i.e. collecting tax for the government and preventing smuggling. The study team believes that it would be better if the three administrations merged, forming a single large powerful organization so that a base for modern and equitable tax and customs administration system, effective resource utilization and quick service delivery can be laid down. The merge was eventually put into effect with the knowledge, participation and approval of the employee and senior management members and taxpayers. The pre-merger project such as the pilot program, carried out for six months beginning from November 2008, has revealed that all the newly designed tax and customs procedures test have been carried out to everyone's satisfaction i.e. it was successful and has produced very beneficial effects to both the authority and its customers or stakeholders. Presently, the Authority is exercising the powers and duties that were granted to the Federal Inland Revenue Authority and the Customs Authority by other existing laws.

The ERCA has the following objectives:
To establish modern revenue assessment and collection system; and provide customers with equitable, efficient and quality service,
To cause taxpayers voluntarily discharge their tax obligations,
To enforce tax and customs laws by preventing and controlling contraband as well as tax fraud and evasion,
To collect timely and effectively tax revenues generated by the economy;
To provide the necessary support to regions with a view to harmonizing federal and regional tax administration systems.

Vision - To be a leading, fair and modern Tax and Customs Administration in Africa by 2020 that will finance Government expenditure through domestic tax revenue collection.
Mission - ERCA will contribute to economic development and social welfare by developing a modern Tax and Customs Administration that employs professional and highly skilled staff who promote voluntary compliance amongst individuals and businesses, and take swift action against those who do not comply.
Values - ERCA will understand its customers and their needs, treat them with trust and respect and help them meet their obligations. We will act with integrity, transparency and professionalism, and enforce customs and tax related laws. We will work closely with stake holders and ensure the participation of women.

The ERCA shall have the powers and duties to:

establish and implement modern revenue assessment and collection system;
provide, based on rules of transparency and accountability, efficient, equitable and quality service within the sector; properly enforce incentives of tax exemptions given to investors and ensure that such incentives are used for the intended purposes;
implement awareness creation programs to promote a culture of voluntary compliance of taxpayers in the discharge of their tax obligations;
carry out valuation of goods for the purpose of tax assessment and determine and collect the taxes;
conduct study and research activities with greater emphasis to improve the enforcement of customs and tax laws, regulations and directives and the collection of other revenues; and based on the result of the study and research initiate laws and policies and implement the same up on approval;
collect and analyze information necessary for the control of import and export goods and the assessment and determination of taxes; compile statistical data on criminal offences relating to the sector, and disseminate the information to others as may be necessary;
organize a training center wherein to build employees' capacity; and design appropriate training schemes;
examine goods and means of transport entering into or departing from Ethiopia through customs ports, frontier posts and other customs stations, and ensure that customs formalities are complied with;
provide information and appropriate support to the Federal Police in the control of illicit trafficking of goods and combating contraband; and cause appropriate actions be taken in accordance with the law;
investigate customs and tax offences, institute and follow up criminal proceedings in courts; for the discharge of such responsibilities, organize its own prosecution and investigation units and supervise their performance ;
inspect and seize documents under the possession of any person that are required for the enforcement of customs and tax laws; organize and operate modern laboratory inspection of goods and documents;
decide the place where import and export goods are to be deposited; establish warehouses, issue warehouse licenses; supervise duty-free shops; control the handling and care of deposited goods; suspend or revoke warehouse licenses; collect license and service charges;
delegate, fully or partially, its powers of investigation, prosecution, prevention and control of customs and tax offences as well as tax assessment, collection and execution powers to justice departments and revenue collecting agencies of regional states; and provide the necessary support for and follow up its implementation;
oversee and supervise the activities of the National Lottery Administration;
provide appropriate capacity building support to regional revenue collecting agencies with a view to harmonizing federal and regional tax administration systems;
enter into contracts and international agreements regarding tax and customs administration;
exercise the powers and duties that were granted to the Federal Inland Revenue Authority and the Customs Authority by other existing laws;
own property, enter into contracts, sue and be sued in its own name;
perform such other related activities as required for the attainment of its objectives.

The ERCA has its headquarters in Addis Ababa. It is led by a Director General who reports to the Prime Minister and is assisted by five Deputy Director Generals, namely D/Director General for Program Designing of Operation and Development Businesses; D/Director General for Branch offices' Coordination and Support; D/Director General of Enforcement Division; D/Director General, Corporate Functions Division; Change Management and Support Sector; and Enforcement Sector. Each deputy director general oversees at least four directorates. Both the Director General and the Deputies are appointed by the Prime Minister.

Since 2006, great strides in automating ERCA's operations had been made, hence ERCA's daily operation has become improved and service delivery to importers, exporters, taxpayers and other customers has become a lot easier. The ERCA has witnessed success in revenue collection over the past five years beginning from 2006. During this period, the ERCA has tripled revenue collection from 11.2 billion birr in 2006 to 35.6 billion birr in 2010. Consequently the contribution of the revenue to covering the federal government's expenditure had considerably grown from 37.54 percent in 2006 to 55.35 percent in 2010.

In this article, we are going to discuss the automated operation in ERCA and the benefits both ERCA and its customers obtained.