The Ethiopian Revenues and Customs Authority (ERCA) is to start collecting the fingerprints of Ethiopians residing in the United States (US) who have businesses in Ethiopia, as of Monday, April 4, 2011.
A total of 157,816 Ethiopian citizens received legal resident status in the US between 1930 and 2010 and received legal permanent residence permits, according to the US Department of Homeland Security. Last year, 14,266 Ethiopians obtained residency permit, according to the department.
However, the number and identity of those who have businesses in Ethiopia have not yet been identified by the ERCA. In order for them to be allocated a Tax Identification Number (TIN) they need to register even while residing abroad.
All taxpayers are required to register their businesses with the ERCA and submit the owner’s fingerprints to register for a TIN, which is required to receive a business licence and engage in commercial activities in Ethiopia, according to Proclamation 286/1994.
To date, 1.2 million individuals have submitted their fingerprints in Ethiopia.
The registration will take place in US states where sizeable numbers of Ethiopian citizens reside, such as Washington DC and Los Angles, according to Haileye Mekonnen, director of the Information Technology Administration Directorate (ITAD) for ERCA.
Ethiopians in states where the registration is not available must contact the Ethiopian Embassy for assistance, according to a special advisor from the authority’s IT department.
Subsequent to internal disagreements over who to send to the US to administer the registration, the ERCA sent the special advisor.
A total of 10 individuals from different departments had been selected to travel to the US to implement the registration, but the selection process caused disputes among the various candidates, according to sources in the ERCA who were not authorised to comment.
Finally, Melaku Fenta, director general of the authority, decided that the registration can be done by embassy personnel and he sent only one individual to train them, sources told Fortune.
The software needed for taking the fingerprints will be installed and the employees at the embassy will receive training to carry out the process so that it can be done on a regular basis for those who are required to obtain an Ethiopian TIN, according to sources.
The issuance of a TIN requires that taxpayers appear in person to give their fingerprints, according to the Ethiopian Embassy in Washington DC.
The ERCA started collecting fingerprints in July 2009. The project was awarded to Copycat Ethiopia IT Plc, a Kenyan based company, for 6.6 million Br.
The HP Blade networking system, consisting of a server stationed at the authority’s head office to connect laptops, digital cameras, and scanners to upload the digital fingerprint to the Automated Fingerprint Identification System (AFIS) software, forms the electronic backbone of the project. The software catalogues the photographic images of individuals with their fingerprints.
Many businesses in Ethiopia have a local manager, who usually pays the taxes, while the owner lives abroad.
The ERCA has rejected the fingerprints of the managers and requires the owner’s fingerprints to be registered in the new database, according to the authority.
However, leaders in the various Diaspora communities have expressed their concern that some members of their communities may not be willing to cooperate due to differences with the government; they fear the data obtained from the registration process might be used against them.
“This is not about politics or ideology; it is strictly about business,” Dina Mufti, spokesperson for the Ministry of Foreign Affairs (MoFA), told Fortune. “Other nations have their own laws and we have our own laws, and in some countries tax evasion is a serious crime. We have a weak tax regime and we need to curb tax evasion and other financial crimes.”
It may also be difficult to implement the requirement for fingerprints in the US as there are Constitutional limitations on such a practice.
Dina declined to enter into the details of the arrangement MoFA has with the US government, but said that they have reached a consensus.
“We can have differences, but our relations remain excellent,” Dina said.
“The right of the people to be secure in their persons, papers, and effects, against unreasonable searches and seizures, shall not be violated,” according to the Fourth Amendment of the US Constitution.
There are strict interpretations of this amendment when it comes to fingerprinting. The US government might be prohibited from facilitating the registration process for Ethiopian taxpayers due to the precedents established in the cases of Hayes v Florida (1985), Davis v Mississippi (1969), Napolitano v US (1965), and Smith v US (1963).
The ERCA is also registering those who have returned to Ethiopia for registration until June 30, 2011.