“Why may not that be the skull of a lawyer? Where be his quiddities now, his quillities, his cases, his tenures, and his tricks?”
–William Shakespeare, Hamlet, Act 5, Scene 1, lines 100-101
“… and look at your laws: criminal law, civil law, property law, commercial law, international law, the law of the sea, law and order, legal codes, legal books…”
–From ‘Excess’ by Sebhat Gebre-Egziabher, in SEED and LechnoOther Short Stories, Retold by Wendy Kindred, p. 4
In a moment of dismissive hubris, the Ethiopian tax system may be described as a loose agglomeration of proclamations, regulations, directives, rules, etc., which despite their loose ends and rough edges, seem to fulfill the singular purpose for which they are designed, namely raising revenues for the Ethiopian government. In the face of these loosely connected laws, one is tempted to conclude like Jacques Vanderlinden did more than forty years ago about the Ethiopian legal system as a whole: that is, it does not as yet exist. The Ethiopian tax system has not been blessed with the excellent organization of many of the modern laws of Ethiopia—which (thanks to the codification project the country undertook in the 1950s and 1960s) were organized into well-written codes. A system (understood as an orderly arrangement of rules and institutions) is not the first impression that one gets out of coming face to face with the dizzying array of taxes scattered almost haphazardly in so many disparate pieces of legislation.
Luckily, we don’t have to subscribe to impossibly high standards (which appear to inform the opinions of Professor Vanderlinden) to qualify a given system as a legal system. If, in the words of John Henry Merryman, a legal system is understood merely as “an operating set of legal institutions, procedures and rules,” it is possible to qualify the rules of any sovereign state as a legal system, regardless of the degree of legal organization involved and the level of legal development in a given country. In a sense, it is possible to speak in terms not only of a legal system as a whole, but also parts of that legal system, such as a criminal justice system, a revenue system, or as this article proposes, a tax system. To the extent it is possible to detect a hierarchy of institutions, laws, and procedures (however imperfectly these are understood), it is possible to write about a tax system like that of Ethiopia without losing sight of the fact that some tax systems are better organized and more coherent than others. The Ethiopian tax system has an operating set of legal institutions (such as the parliament, tax authorities, and tax appeal tribunals and courts), procedures (for assessment, collection and complaints handling), and rules (the constitution, proclamations, regulations, directives, etc.).
The modern “Ethiopian tax system” (let’s put it, provisionally, in quotation marks) is a product of more than half a century of experimentation in legislation and tax reform. It had neither the grand lawgiver to guide and direct it from behind nor a clear set of overarching policies to inform its directions. Since its humble beginnings in the 1940s, the modern Ethiopian tax system has developed and evolved by fits and starts as the needs for revenue arise, as governments change and as the economy and international situations shift. Over the course of this period the Ethiopian tax system went through some major revisions and numerous piecemeal amendments.
This article will attempt to show that there is a system behind the apparently haphazard and disparate pieces of tax legislation of Ethiopia. No one has ever looked at the Ethiopian tax system as a whole (not as legal scholars would have liked it anyway) and it is therefore no surprise if the Ethiopian tax system strikes one as random, disorganized, and incoherent in places. We are more accustomed to talking (if ever) about income taxes (even then, of specific income taxes), the value added tax, or customs duties than of the Ethiopian tax system as a whole.
Since the jurisprudence of Ethiopian taxation is yet to develop fully, this article will draw upon the comparative experience of some tax systems elsewhere to illuminate the “gaps” in, and suggest future directions for, the Ethiopian tax system. Some of the terminologies used in this article are adopted from other tax systems for heuristic purposes. Due to the paucity of information on regional tax practice, the article will not deal with taxation at the regional level, except where federal laws impact the operation of regional tax systems.
This article is divided into two parts. Part I of the article will address the constitutional and administrative issues surrounding the Ethiopian tax system. The second part will deal with the organization and sources of tax laws, including tax dispute settlement schemes in Ethiopia. The article will end with a conclusion and some recommendations. Through the legal and institutional arrangements that have made the Ethiopian tax system into what it is (in spite of the gaps and loose ends), the article aims to draw attention to the patterns that underlie the Ethiopian tax system.
. Jacques Vanderlinden, Civil Law and Common Law Influences on the Developing Law of Ethiopia, 16 Buff. L. Rev. 250, 256-57 (1966) (denying that the Ethiopian legal system had yet existed after Ethiopia commissioned some of the most distinguished jurists at the time to codify its laws—the Penal Code in 1957, the Civil, Commercial, and Maritime Codes in 1960, the Criminal Procedure Code in 1961 and the Civil Procedure Code in 1965).
. John Henry Merryman, The Civil Law Tradition: An Introduction to the Legal Systems of Western Europe and Latin America 1-4 (2d ed. 1985); Contemporary Legal Educ. Series, The Civil Law Tradition: Europe, Latin America, and East Asia 3 (1994).
. Eshetu Chole, Towards a History of the Fiscal Policy of the Pre-Revolutionary Ethiopian State: 1941-1974, in Eshetu Chole, Underdevelopment in Ethiopia, Organization for Social Science Research in Eastern and Southern Africa (OSSREA) 63 (Eshetu Chole ed., 2004) (“[I]t [the Ethiopian tax system] evolved in an ad hoc basis, in response to specific needs and pressures, i.e., in a planning vacuum.”).
. The major tax reforms in Ethiopia occurred in the 1940s, in the aftermath of the Ethiopian revolution of 1974, after the fall of the Derg in 1991 and most recently in the 2002 tax reforms.
. This is not a significant omission, as the Federal Government has had an overwhelming influence over the regional tax system, to the extent the latter is said to exist.