An Indian IT major is assisting the Ethiopian Revenues and Customs Authority (ERCA) transform its valuation methodology to a transaction cost system from a minimum price setting system to prevent under-invoicing.
The 3.5-million birr ($203,000) project is being undertaken by Indian government-run Centre for Development of Advanced Computing (C-DAC) to enable the ERCA comply with the World Trade Organisation Agreement on Customs Valuation. The contract was signed in September.
India's Central Board of Excise and Customs is the consultant for the project at no cost to ERCA according to Fekadu Bekele, the authority's director of customs valuation.
The new system will depend on invoices provided by importers as opposed to the existing database of minimum prices of an estimated 7.5 million goods. The automated system is expected to eliminate under-invoicing.
The new system is expected to be ready on a trial basis in six months, enabling ERCA to obtain up-to-date price information for every sector and eliminate problems associated with outdated prices.
ERCA hopes that the new system will help the authority achieve its target of collecting revenue of 70 billion birr ($4 billion).
(Groum Abate can be contacted at groumabate@gmail.com)