Ethiopia is working to stem illegal financial flows (IFFs) of billions of US dollars every year through trade misinvoicing in collaboration with foreign partners, according to one of the country’s senior tax authority officials.
Director of planning and performance follow-up at the Ethiopian Customs and Revenue Authority (ERCA), Sisay Baharu, was commenting on Global Financial Intelligence’s (GFI’s) recent report, Illicit Financial Flows from Developing Countries: 2004-2013,which was published in December, (Trade Based Financial Crimes, 30 January 2015).
The GFI report said Ethiopia was losing close to two billion US dollars on average each year through trade misinvoicing.
Out of the total of nearly US$26 billion channeled out of Ethiopia via IFFs in the ten years from 2004 to 2013, about US$19.7 billion left the country through trade misinvoicing, mainly by importers, according to the GFI report.
“As of last year, we are working hard to combat the practice [of misinvoicing], especially on under-invoicing by importers and local traders,” according to Baharu.
“In collaboration with Indian customs and excise, last year we…replaced the old system and established a new customs database, which is linked to global price and which updates itself automatically,” he said.
Rewards for informers
“In addition, we are also identifying major importers in the country and closely following their activities with our intelligence unit,” Baharu said.
We also plan to continue using the public to inform us about tax frauds,” he said, adding that informers could be paid up to 10 per cent of “stolen” tax money that they help to recover.
Categories: Trade Based Financial crimes News
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