Ethiopia Gives Taxpayers 3-Month Deadline to Integrate QR Codes into Receipts

This initiative is part of a broader digitization effort aimed at enhancing authentication and supporting revenue collection goals.

Taxpayers in eight Ethiopian cities have three months to start integrating QR (quick response) codes into their receipts, in a move that is part of a broader digitization effort aimed at enhancing authentication and supporting revenue collection goals.

The country’s Ministry of Revenues has issued a letter notifying branch offices of an amendment to the tax receipt issuance and administration directive that has been in effect for the past five years.

The directive now mandates that all receipts issued by businesses and individual service providers must include a QR code of at least 2cm on each side, printed using ‘Inkjet’ ink. Printing presses that wish to print QR-marked receipts will be required to apply for access to the QR code portal provided by the Ministry of Revenues and adhere to applicable data privacy and protection laws.

Furthermore, taxpayers will be required to obtain approval from the Ministry before ordering QR-marked receipts from printing enterprises.

Tax officials will not accept invoices that do not include the QR code, according to the directive inked by Aynalem Nigusie, the Minister of Revenue.

The move, which comes amid concerns that the country is under-performing its tax revenue potential, follows a proposal in Kenya to designate all digital payment systems as virtual electronic tax receipts (ETR) systems.

Increasing Tax Payers by Over 10x

Combined, all Kenyan telcos and the banks who are doing mobile money have over two million of them, 10x the ETRs at KRA.https://t.co/4I0FvIcaCO @KRACare pic.twitter.com/JNMnT4gtai

— BitKE (@BitcoinKE) October 11, 2024

Ethiopia has made significant strides in tax collection over the past two decades, with revenues increasing from 12.4 billion Birr ($102 million) in 2005 to 165.3 billion Birr ($1.3 billion) in 2015, surpassing half a trillion Birr (~4$ billion) by the end of the 2023/24 fiscal year.

However, despite this growth, the country’s economic output has outpaced its tax revenue. The tax-to-GPD ratio, which stood at 13.4 percent in 2015, declined to seven percent by the end of the last fiscal year.

Tax officials have attributed the stagnant revenue figures to several factors, including:

The issue was highlighted during the Prime Minister’s recent address to Parliament where he linked poor tax collection to the widespread informal economy.

“We do not collect taxes,” the Prime Minister remarked.

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