Addis Abeba – Mayor Adanech Abiebie announced that Addis Abeba’s revenue has increased eightfold over the past seven years, a growth she attributes to efforts made “without any tax rate increases.”
Addressing members of the Addis Abeba City Council during its second regular session of the fourth working year on 19 February, 2025, the mayor highlighted the city’s significant budget expansion. She noted that while the city’s budget stood at 30 billion birr seven years ago, it has now reached 111.5 billion birr in just six months. Adanech attributed this remarkable increase to the expansion of tax administration, improvements in tax and audit systems, and enhanced revenue collection strategies.
According to the mayor, a total of 125.5 billion birr was targeted for collection over the past six months, of which 111.5 billion birr—90% of the goal—was successfully collected. Compared to the 74.3 billion birr collected during the same period last year, this marks an increase of 37.2 billion birr, reflecting a 50% growth in revenue collection.
This development follows more than a year after the Addis Abeba Revenue Bureau implemented a revised tax rate on house roofs and walls, a move that sparked widespread debate and concerns among homeowners about its potential financial impact.
Many residents have voiced their frustration, arguing that the city administration should have considered the prevailing economic challenges before implementing the revised tax rates.
In May 2024, the Addis Abeba Administration announced that it had collected over six billion birr within a year of implementing the revised tax rate on house roofs and walls, exceeding the 300 million birr collected in the previous fiscal year.
Last month, the Enat Party announced that the High Court has accepted its lawsuit against the Addis Abeba City Administration regarding the “controversial” roof and walls tax. The party stated that the court deemed a study conducted two years ago, which served as the basis for the tax, “inadmissible.”
Addressing concerns regarding the revised tax rate, Mayor Adanech clarified that adjustments were made based on the 1968 proclamation by revising the per-square-meter rental rates.
“No additional charges beyond this revision were imposed,” she explained. “Under the new structure, payment plans have been introduced, allowing residential properties to pay 50% upfront and commercial properties 75%.”
Regarding legal provisions for pensioners and economically disadvantaged individuals, the mayor acknowledged the existence of legal frameworks to support them but emphasized the need for close monitoring of implementation at all levels. “Efforts are ongoing to ensure proper execution,” she added.
The mayor further stated that the city administration has been actively working to enhance tax compliance and address market disruptions over the past six months. As part of these efforts, she noted that 8,450 businesses previously unregistered under the Value Added Tax (VAT) system have now been integrated, contributing to a broader initiative aimed at strengthening tax compliance.
“The control and law enforcement measures implemented in Merkato and other major commercial areas have not only contributed to increasing revenue but have also promoted fairness,” she stated.
In November 2024, Addis Standard reported significant disruptions in trading activities at Merkato, Addis Abeba’s largest commercial hub, where numerous shops remained closed for over a week. The shutdown was primarily driven by protests from shop owners against the mandatory implementation of a receipt-based transaction system, a policy that has sparked heated debates between merchants and government officials. AS
