Staff Reporter
(Nairobi, Kenya) — The Addis Ababa Revenue Bureau has unveiled a plan to collect 380 billion Birr in tax revenue for the 2026/27 budget year, as the city administration seeks to fund expanding municipal projects and public services.
According to Mr. Sewnet Ayele, Communications Director of the Bureau, the total municipal collection target across all revenue channels for the upcoming fiscal year stands at 502.27 billion Birr, with the Revenue Bureau directly tasked with securing 380 billion Birr of that total. Municipal officials stated that the city will direct approximately 72 percent of total collections toward sustainable development projects and public infrastructure.
As part of the collection drive, the Bureau outlined specific compliance requirements for the city’s 456,000 “Category B” taxpayers—a commercial group comprising small-to-medium businesses, property rental operations, and metered taxi services.
Under the revised income tax proclamation, tax assessments have been issued via SMS notifications to registered business owners whose records are complete.
- Primary Compliance Deadline: Taxpayers who have received SMS notifications must settle their annual tax obligations through digital payment channels by August 6, 2026.
- Delayed Notifications & Penalty Waiver: Business owners who receive notifications after July 25, or whose messages were delayed, will face no financial penalties. Officials grant them a grace period allowing them to settle obligations up to August 27, 2026.
- Appeals and Reassessment: Taxpayers disputing their tax assessments as excessive can submit formal grievances at the district level. Sub-city daily revenue assessment teams forward these appeals and conduct physical reviews before issuing adjusted rulings.
The Bureau projects collecting 9.2 billion Birr from Category B traders during this fiscal cycle. Bureau officials noted that this figure remains small compared to the aggregate salary income tax collected from formal public and private sector employees—a structure officials say protects small enterprises from disproportionate tax burdens and facilitates business expansion.
The city’s expanded tax drive comes during a period of heightened economic pressure for residents across Addis Ababa and broader Ethiopia, characterized by persistent inflation and a rising cost of living.
While municipal authorities maintain that increased tax collection is vital to supporting urban infrastructure and public utilities, small business owners and independent traders have raised concerns over shrinking profit margins and escalating operating costs. Community representatives note that for many small-scale operators, growing tax obligations alongside elevated prices for basic goods and services continue to strain household and business finances.
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