UK consultants, Adam Smith International Ltd is to study Ethiopia’s potential to raise revenue from tax under contract to the Ethiopian Revenues and Custom’s Authority. The Consultant will conduct the study for 10.7 million birr according to the contract signed between the two parties last week. ERCA’s interest to engage a company to evaluate the potential tax revenue in the current economy initially attracted 16 companies. The final shortlist consisted of six companies: included McKinsey & Co, KPMG of Netherlands, DFC &VNG partners, the local office of Ernst & Young, the India office of Deloitte Touche Tohmatsu Ltd as well as Adam Smith. Three companies, Deloite, Mckinsey and Adam Smith passed the technical evaluations and Adam Smith was awarded the contract because its 10.7 million birr proposal was significantly lower than the 26.5 million birr offered by Deloite and the 38 million birr offered by Mckinsey. The bid offered by Adam Smith was also lower than the 15 million birr ERCA had been offered two years ago in a bid that was later on cancelled. The project will be funded by financing from the World Bank’s Public Sector Capacity Building Program. It is expected that the study will be conducted at the national level including all city and regional administrations to identify the potential revenue from each tax category and possible gaps. The study will correct any flaws in the tax system by establishing the taxable amount in the economy thus ensuring that there will be no over or under collection according to an expert with the tax authority. It is expected that Adam Smith will complete the job in 12 months. Source (Merkato.com)
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