School of Law

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Browsing School of Law by Subject "Access to justice"

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    Evaluation of the Impact of Advance Deposit in Tax Appeals: The Case of Addis Ababa
    (Addis Ababa University, 2025-08-01) Hikma Tessema; Taddese Lencho
    The requirement of advance payment, also widely known as the principles of pay now argue later, is the core of appeal under Ethiopia's tax appeal system. The Federal Tax administration proclamation, proclamation number 983/2016 under article 56 and 57 clearly state that a tax payer who wish to contest the decision of a review department is bound to pay 50% and 75% of the contested tax in advance and in case of customs the taxpayer is bound to pay 100% upfront. Although the rationale for such requirement primarily is for revenue protection and deterrence of frivolous appeals, its strict application raises questions concerning taxpayers' right to access justice and potential financial hardship specifically on small and medium taxpayers. To this end this research explores the legal and economic impact of this requirement, advance payment, using a qualitative research design combining both empirical inquiry and doctrinal legal analysis. Literature of Ethiopian tax legislations are extensively reviewed coupled with comparative study of international practice. A semi structured interview and questionnaire were also administered to a total of 60 taxpayers from category A, B, C taxpayers and tax officials at ministry of finance and ministry of revenue, judges of the Federal Tax Appeal Commission (FTAC) and tax lawyers and auditors. The result shows that due to its huge financial burden the advance payment requirement imposed on them taxpayers are hindered from appealing contested tax assessments thereby affecting the constitutionally guaranteed right to access justice. Many taxpayers responded that due to the deposit requirement a substantial number of meritorious grievances are often left unchallenged. Comparative analysis from other jurisdictions practice reveals that alternative mechanisms such as bank guaranty, property mortgage and pledge, case by case judicial waiver and reduced amount of advance payment are putted in place to mitigate the effect of the requirement Finally, the study reveals that the current rigid advance payment requirement disproportionately favors government revenue protection over tax payers right to access justice and finally recommends legal and policy reform such as bank guaranty, property mortgage and pledge, case by case judicial waiver and reduced amount of advance payment to ease the impact of the advance payment requirement