Mercato Merchants in Crisis: Fear of Property Seizures Drives Shop Closures
In Addis Ababa’s bustling Mercato, a wave of confusion and fear has swept through merchants as rumors of government property confiscation circulate widely. Concerns are mounting about sudden and ambiguous government actions enforcing receipt-based trading requirements, sparking a wave of shop closures and a climate of uncertainty in Ethiopia’s largest marketplace.
One anonymous merchant attributed the turmoil to new demands for receipts on all goods. “Previously, our capital was estimated by the authorities, and taxes were levied based on a specified scale. If it fell below a certain threshold, we weren’t required to pay,” the merchant explained. “Now, authorities have declared that all retailers must register within the system and will be taxed without a specified scale.” The merchant highlighted that importers frequently do not provide receipts, leaving retailers vulnerable to penalties and enforcement actions. “We are worried that our goods will be confiscated,” the merchant added, noting the lack of clear guidance from officials about whether their assets could indeed be seized due to receipt shortages. This ambiguity has driven some merchants to close their shops and hide their goods, intensifying the crisis in Mercato. The merchant claimed that traders had already lost up to 14 million birr worth of goods due to these unclear regulatory measures.
The Addis Ababa Revenue Office recently responded, clarifying their position on these enforcement actions. “We said don’t sell without a receipt, but we have no intention to confiscate goods,” they stated, emphasizing that their goal is to bring order to the market by curbing illegal trading practices and encouraging compliance among businesses. Tesfaye Negash, Director of Tax Intelligence and Investigation at the Addis Ababa Revenue Bureau, explained that a citywide campaign had been in effect since mid-September to address compliance issues systematically. This campaign aims to:
- Register businesses that have not yet entered the VAT system.
- Issue licenses to previously unlicensed businesses.
- Enable eligible businesses to print invoices, addressing widespread evasion of official invoicing practices.
Special attention, the Bureau stated, is being given to major shopping malls in Mercato. Amid this campaign, some merchants have closed their shops and relocated their goods, fearing what they see as an aggressive approach that could lead to property seizures.
The Bureau’s response, delivered through Fana Broadcasting Corporation, stressed that recent efforts to engage with traders have included extensive discussions to promote receipt-based trading. “A consensus was reached with many merchants, but some individuals unwilling to comply have spread misinformation,” the Director of Communications said, adding that the bureau’s aim is to build a lawful business system that benefits the entire community.
Tesfaye Negash further explained that the Bureau’s enforcement efforts focus not on confiscation but on fostering compliance. “Conducting business without receipts is punishable by law, and traders must register any goods purchased without receipts to avoid penalties. However, we do not intend to arbitrarily seize property without legal grounds.” Negash urged the business community to support these reforms, discouraging misinformation and encouraging cooperation. He also invited the public to report any cases of non-compliance or corruption through the Bureau’s hotline.
Merchants, however, voiced deep-rooted concerns about issues in the regulatory system. A local retailer pointed out that importers often provide no receipts or issue undervalued receipts, which places retailers at risk when authorities demand proof of purchase. “The government needs to address invoicing at the source rather than punishing retailers for issues beyond their control,” he stated.
Some traders also alleged that certain revenue officials exploit these regulations for personal gain, asking for bribes under the guise of enforcement. A member of the community, suggested that the regulatory campaign should prioritize importers and manufacturers, who often evade compliance. “If the government controls the importers, the whole system will follow suit. Retailers are simply forced to close their shops because they cannot obtain receipts,” he explained.
Negash acknowledged recent temporary shop closures, including an incident at the Yerga Hayle shopping mall, where customs officials seized unlicensed goods. “The mall has since reopened, except for stores awaiting commercial permits,” he said, stressing that the Bureau’s focus remains on compliance, not confiscation.
The Bureau clarified that official notifications have been sent to traders to reaffirm that compliance with receipt requirements will not result in asset seizures. “Our aim is to create order, not fear,” Negash emphasized, urging businesses to follow legal practices and contribute to a fair and structured marketplace in Addis Ababa.
