News: Addis Abeba City Council approves record 140.3 billion birr budget for 2016 fiscal year, surpassing prior year by 40.3%

Addis Abeba – The Addis Abeba City Council has approved a staggering budget of 140.3 billion birr for the upcoming 2016 Ethiopian fiscal year. The budget showed a significant increase of 40.3% compared to the previous year.

Out of this total budget, approximately 23.5 billion birr has been allocated as a recurrent budget, while a substantial amount of 69.3 billion birr has been set aside for capital expenditures. Additionally, the 11 districts within Addis Abeba will receive an allocation of close to 42 billion birr.

Since the administration of Mayor Adanech Abiebie assumed office three years ago after the sixth national election, the budget of the capital city has experienced a significant increase, doubling from 70 billion birr. During the two-day assembly held starting 8 July 2023, Abdir Kadir, the Head of Addis Abeba City Finance Bureau, presented the budget plan to the council. Abdir emphasized that various sources of revenue, such as taxable and non-taxable income, municipal and road funds, foreign aid, and foreign loan income, are being considered to finance the budget.

In recent months, the administration has taken measures to increase its revenue. Three months ago, the Addis Abeba City Administration Revenue Office announced the revision of tax rates on condominium house roofs and walls. This decision has sparked a heated debate and raised significant concerns among homeowners. Despite these concerns, the city administration insists that updating the tax rate, which has been in place since 1968, is necessary. By revising the tax rate, the administration expects to collect close to nine billion birr.

During a conference organized by the Addis Abeba Chamber of Commerce and Sectoral Associations last month, Adem Nur, the head of the city administration’s revenue office, stated that the income currently generated from annual land leases and property tax is critically insufficient. It fails to cover the costs associated with collection and has remained stagnant for an extended period, not adjusting to inflation rates. As a result, Nur emphasized the urgent need for periodic updates in line with current rental market trends.

The administration is also anticipated to soon implement a property tax, in line with the decision of the House of Peoples’ Representatives last January. Under this decision, the revenue generated from property taxes will be allocated to the respective cities and regional states instead of the federal government.

Last week, the House of Peoples’ Representatives also approved the proposed federal budget amounting to 801 billion birr for the 2016 Ethiopian fiscal year. AS