This study is focused on the presumptive tax reassessment of small and micro enterprises (SMEs) in Addis Ababa City Administration that took place in 2017. The reassessment process was based on average daily revenue estimates calculated by teams of assessors and validated by a series of committees. The release of the reassessment results in 2017 led to widespread public outcry in Addis Ababa, suggesting possible shortcomings of the processes and procedures used. The study finds that overall processes and procedures were opaque both to taxpayers and assessors, with insufficient public awareness campaigns and training sessions. The indicators that were most commonly used to estimate average daily revenue lacked objectivity, and were thus unevenly applied by different assessors to businesses of the same type. As a result, average daily revenue estimates and the taxes levied thereon were not fair and equitable between businesses of the same type in similar locations. The study also identifies some important weaknesses in the complaint resolution process, such as the fact that complaint hearing committees were not empowered to increase initial assessments if the evidence existed. As a result, there was no cost to taxpayers for submitting complaints, which likely contributed to the overwhelming number of complaints received by the authority.
