By Hilina Alemu And Addisu Deresse | Addis Fortune

ADDIS ABABA, Ethiopia — More than 40 businesses, mainly in Merkato and Piazza areas, have been shut down over the last nine days after intelligence officers of the Ethiopian Revenue and Customs Authority (RCuA) allegedly caught them red-handed violating the Value Added Tax (VAT) Law, officials of the authority disclosed.

Over 100 individuals operating in these businesses (shops) were arrested under the surprise secret operation the authority started on April 4, 2009; close to 21 of them appeared before the Real Time Dispatch – the Authority’s own judiciary system for those caught red-handed – within 48 hours and the cases have been adjourned for this week (within 10 days of their arrest).

By the time Fortune went to press late last Friday afternoon, big names in the jewellery business around Piazza, near Cinema Empire area of the Arada District, along Hailesellassie Street, such as Africa, Lion, Tana, Eyerusalem and Gebremariam were some of those shops still closed as a result of the shut downs that began on April 4, 2009.

For instance, in Merkato, the largest open-air market in Africa, shops remained closed by press time after the secret investigators had paid them a visit.

“First, four people [intelligence officers] got into the shop,” an eyewitness said describing what happened in one of the shops that was closed and the people who run it arrested. “Then, one [of the officers] asked for jewellery, while the others looked around. The deal on the price went good till the [disguised] buyer asked for a receipt.”

To the surprise of the intelligence officers, the shopkeeper refused to give the undercover buyer a receipt because the price would include VAT; the “buyer” then went out, called the police and pressed charges against the shop, according to the eyewitness who insisted on remaining anonymous.

That was the climax of situation in the shops visited by the investigators that were in breach of the VAT Law; those that allegedly violated the VAT Law by not issuing VAT invoices landed in the authorities detention centre in Lagar customs facility.

“Three individuals who went into the shop together with the buyer served as witnesses,” the person who had observed the situation told Fortune.

Prior to this operation, the RCuA had initiated another tax move which the tax authorities tagged “desk audits.” For the past few weeks, these are some of the major tasks that kept RCuA’s Law Enforcement Department busy.

The desk audit is a form of review and appraisal of accounting books of private and share companies under the federal/large taxpayers category. It has targeted more than 1,000 companies for three years revision and appraisal of their accounting books on transactions from 2006 to 2008, and crosschecking these with the authority’s books, especially documents at its customs branch. There are six audit teams the RCuA has formed to conduct the desk audits.

The audits they conduct are to reconcile documents companies have self-declared during the three years (2006, 2007, and 2008), reports they have obtained from fiscal printers, and data collected from customs.

In yet another move, the authority is dealing with those it alleges are VAT registered entities but do not duly collect the tax as they sell goods without issuing a receipt, thereby prejudicing the government of the due to it.

This VAT proclamation breach issue has been something the authority planned to have dealt with long ago; now it is started and will continue with the operation, a source in the Law Enforcement Department of the Authority told Fortune.

“This is a daily routine task,” the source said. “The authority has been vested with the power and responsibility to collect tax and it has to do so, whatever it takes.”

The law enforcement intelligence team is under the supervision of Gebrewahed Weldegiorgis, former deputy head of Customs Authority, who has now become one of the four deputy directors of the RCuA.

The department has more than 100 intelligence officers. Verifying the expenditure and revenue of the targeted tax payers is part of the main duties of the intelligence team. They are responsible for following up targeted taxpayers suspected of declaring income much less than what their businesses are actually worth, or not registering at all, denying the government the taxes due to it.

There are two aspects of VAT included in Proclamation 609/2008, a law that amended the proclamation for VAT. One deals with the failure to register for VAT, while the other focuses on the failure to use VAT invoices, although registered.

“Any taxpayer who is required to register for VAT commits an offence if found not complying with such obligation and shall, upon conviction, be punished with a fine of not less than 10,000 Br and not more than 50,000 Br and imprisonment for a term of not less than one year and not more than two years,” states Article 50 (a) of the law.

Sub-Article (b) of the article reads, “Any person who is registered for VAT commits an offence if carries out transactions without VAT invoice and shall, upon conviction, be punished with a fine of not less than 10,000 Br and not more than 100,000 Br and imprisonment for a term of not less than two years and not more than five years.”

Nevertheless, if the tax due to the government computed based on the amount shown on the illegal invoice is in excess of 100,000 Br, then the fine shall be equal to the tax amount.

Contrary to these articles, which also state the penalties for breaching them, Tigist Abebe (not real name) a jewellery shopkeeper around Merkato, Werk Tera (a market place for gold jewellery), strongly believes that the sales volume on gold (jewellery) is diminishing as life gets costly. She believes that inclusion of VAT in the price would mean pushing the buyers away from the shop.

“If, for instance, we sell a 21 karat golden ring that weighs 1.15g for 225 Br without VAT and 258.75 Br with VAT, for such a society where paying tax is not much understood, the additional 33.75 Br is a waste,” Tigist told Fortune.

Most people do not buy jewellery for luxury these days. Rather, they consider it a way of saving money; therefore, the buyers think that paying additional money (VAT in this case) is like throwing the money away, she said.

“They can save the money in cash without incurring the cost equivalent to the VAT amount,” the shopkeeper said.

But that is not something tax authorities consider.

“We have no intention of making people lose their businesses and money,” Gebrewahed, the intelligence team leader told Fortune. “We only want to give lessons on the need to pay VAT.”

By Abiy Wendifraw | Addis Fortune

Addis Ababa, Ethiopia — The Kingdom of Saudi Arabia has suspended imports of Ethiopian livestock and meat products from entering its market, sources disclosed.

Though the Embassy of the Kingdom in Addis Ababa said that the action by pertinent organs of the oil-rich gulf state cannot be considered a ban, it nonetheless confirmed, in a written reply to Fortune’s queries, that meat imports from Ethiopia have been stopped and will only resume after making sure that certain requirements are met by Ethiopia.

The issue came to light after the area manager of Ethiopian Air Lines (Ethiopian) in Jeddah received the decision on the suspension by the Ministry of Commerce of Saudi Arabia through Saudi Cargo Import Section, according to sources at Ethiopian.

The written communication Ethiopian’s Area Manager in Jeddah sent to his bosses in Addis Abeba on March 4, 2009, states that the Airlines’ cargo fleet had been allowed to transport a last consignment of meat exports from Ethiopia to Saudi on flight number ET412 of March 6, 2009. That marked the start of the suspension of Ethiopia’s meat export to Saudi, until further notice, and subsequently led to a supply surplus at home.

The next day (March 5, 2009), the responsible department at Ethiopian, in turn, sent a message to Ethiopian Meat Producers, Exporters Association (EMPEA) stating that meat exports to Saudi had been suspended, and they could only export their products on the following day, according to Tamrat Ejigu, secretary general of EMPEA.

“Due to their [the Saudis] decision without warning us earlier, we were forced to sell our products at cheaper prices because we already had prepared large consignments to send to the Kingdom,” Tamrat told Fortune

Though the Kingdom’s reason for suspending Ethiopian meat imports were not clearly stated, the paper from the Embassy says that it is because of some conditions which were contrary to the regulations as regards the sanitation of the slaughtered meat.

However, insect control, refrigerator temperature levels and the quality of roads to slaughterhouses are also factors people involved cite as additional reasons, although the main reason seems beyond these factors, sources told Fortune.

A committee from the pertinent organs in the Kingdom had found some problems while visiting the abattoirs of those that export meat to the Kingdom, and have informed these abattoirs to address these problems.

“Failing to export to our biggest meat importer, Saudi Arabia, for almost the last three weeks means a big loss for us,” an official of the meat exporting enterprise said.

All exporters have been trying to do what is expected from them since the suspension began.

“We are told that the case is being handled by both the Ministry of Foreign Affairs (MoFA) and the Ministry of Agriculture and Rural Development (MoARD), and we are now waiting for any development on it,” the official told Fortune.

Beyond affecting the earnings of exporters, the workforce in the sector and even the Ethiopian, the suspension of meat exports to Saudi is likely to be among the factors that could worsen the current foreign exchange crunch in the country, the manager added.

After Saudi’s decision to suspend the imports, Ethiopian government officials have been negotiating with those of the Kingdom on possible solutions, according to knowledgeable sources.

For instance, MoFA has sent a report on the matter to the Saudi Arabian Embassy in Addis, following which diplomats at the embassy notified the officials in their homeland about the report, according to the written response sent to Fortune. The report states that the abattoirs identified have since addressed the problems which Saudi officials said were contrary to the regulations.

As the embassy confirmed, the Saudi committee is expected to visit Ethiopia to re-inspect these abattoirs.

“If the committee assures that all the shortcomings have been fixed, then meat imports will be permitted again,” the letter sent to Fortune reads.

These are actions necessary to make sure of the sanitation and safety of the food items that reach the Saudi market.

From the meat and meat products Ethiopia has exported to the world market in the first half the current Ethiopian fiscal year, exports to the Kingdom’s accounted for about 1.6 million kilograms or around 39pc of the total figure.

Ethiopian Meat and Dairy Institute (EMDI) disclosed last week that the country plans to increase the supply of meat and meat products from the current 6,000tn annually to 30,000tn.

Last year, Ethiopia earned over 56 million dollars from the export of more than 295,000 livestock and 6,000tn of meat products. In addition, from livestock and meat exports, the country earned 48.2 million dollars in the first half of the current Ethiopian financial year, according to Amaha Sebsibe (PhD), director general of EMDI.

Currently, Ethiopia has 44 million cattle, 46 million sheep and goats and three million camels.

The bulk of the total meat Ethiopia exported in 2006/07 went to Saudi Arabia and UAE. The two Gulf states accounted for slightly over 2.8 million kilograms (48.11pc) and 2.6 million kilograms (45.5pc), respectively, of the total over 5.8 million kilograms of meat exported, according to data from the Ministry of Trade and Industry.

Years back, Ethiopia’s livestock and meat exports to Saudi had been banned because of the spread of Rift Valley Fever (RVF) in the supplier’s land; the ban was lifted on August 23, 2003.

ATLANTA, GA — April 16th-19th, Ethiopia will welcome the world of coffee to Atlanta, Georgia, as a Platinum sponsor of Specialty Coffee Association of America’s 21st Annual Exposition.

The Place Where It All Began

Representatives from the Ethiopia coffee industry say that due to their success as the first African Portrait Country at the SCAA Exposition in Minneapolis in 2008, and a widely recognized trademarking and licensing initiative, Ethiopia’s annual coffee export earnings increased by more than 100 million US dollars in 2008. Inspired by this accomplishment, the Ethiopian coffee industry is coming to Atlanta to share their fine coffee story—a story that for centuries has been so intertwined with Ethiopia’s unique culture and society.

Ethiopia, the birthplace of the cherished bean, boasts a genetic pool of more than 6,000 varieties, including its natural decaffeinated coffee, and still keeps secrets in its rainforests for future generations. After sitting on the sidelines of the global economy for decades, Ethiopia’s coffee industry is emerging as a force to be reckoned with. And the rewards are starting to trickle down to the people who deserve them the most, the farmers who toil from dawn to dusk growing the beans that make their country proud. With this objective in mind, the Ethiopian Commodity Exchange was established in March 2008 to modernize the trading system. The ECX, based on standard coffee contracts, establishes standard parameters for coffee grades, transaction size, payment and delivery, and trading order matching while, at the same time, preserving the distinctiveness of the different coffees.
The new Ethiopian Fine Coffee umbrella logo, a glowing sun with rays of light emanating from an Ethiopian coffee bean, heralds the renaissance of the Ethiopian coffee industry and the bright future ahead. Ethiopia invites attendees and press to visit booth and enjoy a traditional coffee ceremony where you will experience the heavenly aromatic scents and distinct flavors of fine Ethiopian coffees.

For information about the SCAA Exposition click here:

About the SCAA

The SCAA is the world’s largest coffee trade association dedicated to creating a vibrant specialty coffee community. Celebrating 26 years of success, our members represent more than forty countries and every segment of the Specialty Coffee industry.

Contacts:
on behalf of SCAAMike Ferguson, [email protected]

EDITOR’S NOTE: This is a warning to those who do business with Ethiopia’s tribalist dictatorship that is terrorizing the people of Ethiopia.

(BBC) — A United States judge has ruled that lawsuits can go ahead against several companies accused of helping South Africa’s apartheid-era government.

IBM, Ford and General Motors are among those corporations now expected to face demands for damages from thousands of apartheid’s victims.

They argue that the firms supplied equipment used by the South African security forces to suppress dissent.

The companies affected have not yet responded to the judge’s ruling.

‘Wilful blindness’

US District Judge Shira Scheindlin in New York dismissed complaints against several companies but said plaintiffs could proceed with lawsuits against IBM, Daimler, Ford, General Motors and Rheinmetall Group, the German parent of an armaments maker.

“Corporate defendants accused of merely doing business with the apartheid government of South Africa have been dismissed,” she said.

The plaintiffs argue that the car manufacturers knew their vehicles would be used by South African forces to suppress dissent. They also say that computer companies knew their products were being used to help strip black South Africans of their rights.

The judge disagreed with IBM’s argument that it was not the company’s place to tell clients how to use its products.

“That level of wilful blindness in the face of crimes in violation of the law of nations cannot defeat an otherwise clear showing of knowledge that the assistance IBM provided would directly and substantially support apartheid,” she said.

More than 50 companies were initially sued, but after a court demanded more specific details, the plaintiffs decided to target fewer companies.

The US and South African governments supported the companies’ efforts to get the complaints dismissed.

They argue that the legal action is damaging to international relations and may threaten South Africa’s economic development.

By Kristyn Kusek Lewis | Reader’s Digest

When you think “millionaire,” what image comes to mind? For many of us, it’s a flashy Wall Street banker type who flies a private jet, collects cars and lives the kind of decadent lifestyle that would make Donald Trump proud.

But many modern millionaires live in middle-class neighborhoods, work full-time and shop in discount stores like the rest of us. What motivates them isn’t material possessions but the choices that money can bring: “For the rich, it’s not about getting more stuff. It’s about having the freedom to make almost any decision you want,” says T. Harv Eker, author of Secrets of the Millionaire Mind. Wealth means you can send your child to any school or quit a job you don’t like.

According to the Spectrem Wealth Study, an annual survey of America’s wealthy, there are more people living the good life than ever before—the number of millionaires nearly doubled in the last decade. And the rich are getting richer. To make it onto the Forbes 400 list of the richest Americans, a mere billionaire no longer makes the cut. This year you needed a net worth of at least $1.3 billion.

If more people are getting richer than ever, why shouldn’t you be one of them? Here, five people who have at least a million dollars in liquid assets share the secrets that helped them get there.

1. Set your sights on where you’re going

Twenty years ago, Jeff Harris hardly seemed on the road to wealth. He was a college dropout who struggled to support his wife, DeAnn, and three kids, working as a grocery store clerk and at a junkyard where he melted scrap metal alongside convicts. “At times we were so broke that we washed our clothes in the bathtub because we couldn’t afford the Laundromat.” Now he’s a 49-year-old investment advisor and multimillionaire in York, South Carolina.

There was one big reason Jeff pulled ahead of the pack: He always knew he’d be rich. The reality is that 80 percent of Americans worth at least $5 million grew up in middle-class or lesser households, just like Jeff.

Wanting to be wealthy is a crucial first step. Says Eker, “The biggest obstacle to wealth is fear. People are afraid to think big, but if you think small, you’ll only achieve small things.”

It all started for Jeff when he met a stockbroker at a Christmas party. “Talking to him, it felt like discovering fire,” he says. “I started reading books about investing during my breaks at the grocery store, and I began putting $25 a month in a mutual fund.” Next he taught a class at a local community college on investing. His students became his first clients, which led to his investment practice. “There were lots of struggles,” says Jeff, “but what got me through it was believing with all my heart that I would succeed.”

2. Educate yourself

When Steve Maxwell graduated from college, he had an engineering degree and a high-tech job—but he couldn’t balance his checkbook. “I took one finance class in college but dropped it to go on a ski trip,” says the 45-year-old father of three, who lives in Windsor, Colorado. “I actually had to go to my bank and ask them to teach me how to read my statement.”

One of the biggest obstacles to making money is not understanding it: Thousands of us avoid investing because we just don’t get it. But to make money, you must be financially literate. “It bothered me that I didn’t understand this stuff,” says Steve, “so I read books and magazines about money management and investing, and I asked every financial whiz I knew to explain things to me.”

He and his wife started applying the lessons: They made a point to live below their means. They never bought on impulse, always negotiated better deals (on their cars, cable bills, furniture) and stayed in their home long after they could afford a more expensive one. They also put 20 percent of their annual salary into investments.

Within ten years, they were millionaires, and people were coming to Steve for advice. “Someone would say, ‘I need to refinance my house—what should I do?’ A lot of times, I wouldn’t know the answer, but I’d go find it and learn something in the process,” he says.

In 2003, Steve quit his job to become part owner of a company that holds personal finance seminars for employees of corporations like Wal-Mart. He also started going to real estate investment seminars, and it’s paid off: He now owns $30 million worth of investment properties, including apartment complexes, a shopping mall and a quarry.

“I was an engineer who never thought this life was possible, but all it truly takes is a little self-education,” says Steve. “You can do anything once you understand the basics.”

3. Passion pays off

In 1995, Jill Blashack Strahan and her husband were barely making ends meet. Like so many of us, Jill was eager to discover her purpose, so she splurged on a session with a life coach. “When I told her my goal was to make $30,000 a year, she said I was setting the bar too low. I needed to focus on my passion, not on the paycheck.”

Jill, who lives with her son in Alexandria, Minnesota, owned a gift basket company and earned just $15,000 a year. She noticed when she let potential buyers taste the food items, the baskets sold like crazy. Jill thought, Why not sell the food directly to customers in a fun setting?
With $6,000 in savings, a bank loan and a friend’s investment, Jill started packaging gourmet foods in a backyard shed and selling them at taste-testing parties. It wasn’t easy. “I remember sitting outside one day, thinking we were three months behind on our house payment, I had two employees I couldn’t pay, and I ought to get a real job. But then I thought, No, this is your dream. Recommit and get to work.”

She stuck with it, even after her husband died three years later. “I live by the law of abundance, meaning that even when there are challenges in life, I look for the win-win,” she says.

The positive attitude worked: Jill’s backyard company, Tastefully Simple, is now a direct-sales business, with $120 million in sales last year. And Jill was named one of the top 25 female business owners in North America by Fast Company magazine.

According to research by Thomas J. Stanley, author of The Millionaire Mind, over 80 percent of millionaires say they never would have been successful if their vocation wasn’t something they cared about.

4. Grow your money

Most of us know the never-ending cycle of living paycheck to paycheck. “The fastest way to get out of that pattern is to make extra money for the specific purpose of reinvesting in yourself,” says Loral Langemeier, author of The Millionaire Maker. In other words, earmark some money for the sole purpose of investing it in a place where it will grow dramatically—like a business or real estate.

There are endless ways to make extra money for investing—you just have to be willing to do the work. “Everyone has a marketable skill,” says Langemeier. “When I started out, I had a tutoring business, seeing clients in the morning before work and on my lunch break.”

A little moonlighting cash really can grow into a million. Twenty-five years ago, Rick Sikorski dreamed of owning a personal training business. “I rented a tiny studio where I charged $15 an hour,” he says. When money started trickling in, he squirreled it away instead of spending it, putting it all back into the business. Rick’s 400-square-foot studio is now Fitness Together, a franchise based in Highlands Ranch, Colorado, with more than 360 locations worldwide. And he’s worth over $40 million.

When extra money rolls in, it’s easy to think, Now I can buy that new TV. But if you want to get rich, you need to pay yourself first, by putting money where it will work hard for you—whether that’s in your retirement fund, a side business or investments like real estate.

5. No guts, no glory

Last summer, Dave Lindahl footed the bill for 18 relatives at a fancy mansion in the Adirondacks. One night, his dad looked out at the scenery and joked, “I can’t believe we used to call you the black sheep!”

At 29, Dave was broke, living in a small apartment near Boston and wondering what to do after ten years in a local rock band. “I looked around and thought, If I don’t do something, I’ll be stuck here forever.”

He started a landscape company, buying his equipment on credit. When business literally froze over that winter, a banker friend asked if he’d like to renovate a foreclosed home. “I’m a terrible carpenter, but I needed the money, so I went to some free seminars at Home Depot and figured it out as I went,” he says.

After a few more renovations, it occurred to him: Why not buy the homes and sell them for profit? He took a risk and bought his first property. Using the proceeds, he bought another, and another. Twelve years later, he owns apartment buildings, worth $143 million, in eight states.

6. The Biggest Secret? Stop spending.

Every millionaire we spoke to has one thing in common: Not a single one spends needlessly. Real estate investor Dave Lindahl drives a Ford Explorer and says his middle-class neighbors would be shocked to learn how much he’s worth. Fitness mogul Rick Sikorski can’t fathom why anyone would buy bottled water. Steve Maxwell, the finance teacher, looked at a $1.5 million home but decided to buy one for half the price because “a house with double the cost wouldn’t give me double the enjoyment.”

It’s not a fluke: According to the 2007 Annual Survey of Affluence & Wealth in America, some of the richest people “spend their money with a middle-class mind-set.” They clip coupons, wait for sales and buy luxury items at a discount.

No kidding! Talk show host Tyra Banks calls herself the Queen of Cheap and keeps perfume samples from magazine ads in her purse for quick touch-ups.

Sara Blakely, founder of the $100 million shapewear company Spanx, gets her hair trimmed at Supercuts.

And Warren Buffett, the third richest person in the world, according to Forbes, lives in the same Omaha, Nebraska, home he bought four decades ago for $31,500.