Ethiopia : Poor Tax Collection Performance in the Amhara Region

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In the first quarter of the Ethiopian Year, the Amhara region collected 6.2 billion birr in revenue, falling significantly short of its planned 17.9 billion birr target for the same period. Amhara Media Corporation (AMC) has reported that the poor performance is attributed to the region’s security situation.

Fikre Mariam Dejene, Deputy Head of the Amhara region Revenue Office, explained that the security challenges in the region have had a detrimental effect on tax collection, resulting in an 11.6 billion birr collection deficit. He emphasized that this underperformance will have a severe negative impact on development projects in the region, stating, “Failure to meet our tax collection targets means our healthcare institutions and schools will face operational challenges.”

Fikre Mariam Dejene also pointed out that in the previous Ethiopian budget year, 8.4 billion birr in revenue was collected during the same period.

The Amhara region was one of three regions deeply affected by the two-year-long conflict between the Federal government and the Tigray People’s Liberation Front (TPLF), which is estimated to have claimed around one million lives. Before fully recovering from this conflict, the administration led by Abiy Ahmed initiated a military operation in the region, on alleged grounds of disarming Fano Forces operating in the region, but it escalated into a full-scale war. The Federal government deployed air force and mechanized forces with the intent to complete the operation within a few weeks, which proved unattainable. The war still is ongoing in many parts of the region. 

The Federal government declared a six-month-long state of emergency in the region in August this year as Fano forces demonstrated military strength, challenging not only the regional administration but also beyond. The ongoing war has exacerbated economic challenges in the region and resulted in the destruction of crops, among other damages, including the loss of thousands of civilian lives, raising concerns about its negative impact on market supply. Millions of people are already in need of emergency humanitarian assistance, facing conditions resembling famine. Additionally, the number of people displaced from the region has surged, and millions of children are out of school due to the ongoing conflict.

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