Individuals who desire to establish a political party by rallying around a common political objective must have a memorandum of association in which they declare the establishment of the type of. Public finance and taxation in ethiopia pdf in a moment of dismissive hubris, the ethiopian tax system may be. Advances in ethiopias accountancy infrastructure, regulation. The principal taxes currently in place are company profit tax, turn over tax valueadded tax vat, excise tax, customs duty, income tax from employment and income tax from business. The following is the progressive rate table for monthly employment income. The government collects this tax from any individual employees, other than. Effective date this proclamation shall enter into force as of the 7th day of july, 1997. Federal income tax proclamation exclusive document.
The use of the machines at a regional level got underway in 201011. Simachew kebede, the major shareholder of dh simex plc that owns intercontinental addis hotel. Establishment of the secretariat of the house of peoples representatives and of the house of the federation proclamation. Ethiopian legal information portal find laws, cases, legal. Prevention and suppression of terrorism crimes proclamation. Chapter two will introduce the students to the income tax in ethiopia. This article was first published in accas accountancy futures, edition 9 september 2014, accessible at. Ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation.
Consequently, a person will be considered to have a permanent establishment if he has. All legal entities must register for income tax with the ethiopian revenue and customs authority and obtain a tax identification number tin and file annual tax returns by june of the year following the end of the tax year the value added tax vat in ethiopia is levied at a standard rate of 15%. An administrative branch factory workshop, mine, quarry or any other place for the explanation of natural resources and a building site or place where construction and. This proclamation may be cited as the federal income tax proclamation. If the tax authority fails to assess the tax and notify the tax payer of the amount still due within five years from the date of declaration and payment of the tax by the tax payer in accordance with article 6 of this proclamation, the tax so paid shall be final and concessive. Ethiopia has a new tax proclamation that sees a significant. Termination of contract of employment under ethiopian law. Federal tax administration proclamation 4 19 manager means. In addition, principle of economy also requires the tax system to concert tax efforts on those taxpayers with high revenue potential.
Customs under the current legal system of ethiopia, customs duty, tariff and taxes are regulated by a number of laws which include domestic laws and international bilateral treaties to which ethiopia is a part to. Ethiopian legal information portal find laws, cases. A reflection of problems wollela abehodie yesegat abstract this paper examines vat administration in ethiopia and identifies key problems including lack of sufficient number of. Originally from ethiopia, he chairs the australia and new zealand acca members panel. Taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes.
Effective date this proclamation shall enter into force on the date of publication in the federal negarit gazette. This proclamation may be cited as the value added tax proclamation no. Nov 06, 20 3 of the mining income tax proclamation no. It seizes and takes legal action on the people and vehicles involved in the act of smuggling while it facilitates the legitimate movement of goods and people. In a moment of dismissive hubris, the ethiopian tax system may be described as a loose agglomeration of proclamations, regulations, directives, rules, etc. According to this proclamation the contract of employment may be terminated by the following different reasons. Federal negarit gazeta establishment proclamation resources. Head office or any of its branch offices estblished in any part of ethiopia and the tax authorities of the. This proclamation may be cited as the investment amendment proclamation no. Customs duty, tariff and taxes in ethiopia details written by administrator published on 24 march 2009 category. The custom value of the goods under ethiopian customs law is the actual cost of the. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from.
Taxation in ethiopia direct and indirect taxes categories of tax payers declaration of income and assessment of taxes tax incentives addis ababa 12005. Relation with other laws any previous laws inconsistent with this proclamation shall not be applicable with respect to matters provided for in this proclamation. Hate speech and disinformation prevention and suppression proclamation. Item type current location collection call number copy number status date due barcode. This proclamation may be cited as the federal income tax proclamation no. Apr 30, 2008 withholding tax in ethiopia is viewed and administered according to the following legal documents. In ethiopia the employment relationship between an employer and an employee is governed by the ethiopian labor proclamation 3772003. The ethiopian economy is still largely on subsistence level, and in spite of some progress made, ethiopia has only taken the very first steps towards economic and social development.
Ethiopia tax rate for 20162017, 20152016, 20142015 ethiopia income tax rate 20152016. Federal income tax proclamation exclusive document from the. May 2020 ethiopian revenue and customs authority erca. A permanent establishment is defined in article 2 9 of the income tax proclamation. Definitions for the purpose of this proclamation, unless the context otherwise requires. Po box 2189 ormond beach, florida 321752189 usa tel. Ethiopian revenues and customs authority announced that it has identified tax free goods and items for passengers both in volume and size to ease customers hustle in and around the airport service. Ethiopian ethiopian business chamber of commerce development services network taxation. Accounting and tax corporate tax in ethiopia is imposed at a standard rate of 30%.
Federal income tax this regulation is issued by the council of ministers pursuant to article 5 of the definitions of powers and duties of the executive organs of the federal democratic republic of ethiopia proclamation no. Defination of powers and duties of the executive organs of the fdre. A reflection of problems 147 of filing and payments, refunds, audits and penalties. A proclamation to amend the value added tax proclamation. Apr 11, 2011 taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. Corporate tax in ethiopia is imposed at a standard rate of 30%. The principal taxes currently in place are company profit tax, turn over taxvalueadded tax vat, excise tax, customs duty, income tax from employment and income tax from business. May 07, 2016 ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation. In simple terms custom duty is tax tax imposed on goods entering and leaving the country. A term used in this proclamation that is defined in the tax. Withholding agent means a person liable to withhold tax from a payment. Now, therefore, in accordance with article 55 1 and 11 of the constitution of the federal democratic republic of ethiopia it is hereby proclaimed as follows income tax amendment proclamation no.
Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties. All legal entities must register for income tax with the ethiopian revenue and customs authority and obtain a tax identification number tin and file annual tax returns by june of the year following the end of the tax year. Employment income tax is a tax on the earnings of an employee. The law applies a progressive tax rate, except for corporate tax, which is flat 30%. Eshetu alemu, judgment and sentence unofficial english translation. Definitions a term used in this proclamation that is defined in the tax administration proclamation shall have the meaning in the tax administration proclamation unless defined otherwise in this proclamation. Mar 24, 2009 customs duty, tariff and taxes in ethiopia details written by administrator published on 24 march 2009 category. The use of sales registration machines began in addis ababa, ethiopia in february 2008 and its use has expanded significantly during the past 3 and 12 years. Ethiopian tax laws who is required to pay an income tax in. As a federal country, the functions and duties of the government are divided between central and state governments and they are generally defined in the constitution. However, the amount of income and the corresponding tax rate has been static for more than a. In addition to raising revenue, the mor is responsible to protect the society from adverse effects of smuggling.
Update on ethiopias new excise tax proclamation africa legal. The 2002 income tax proclamation governs income tax from employment, from rental of buildings and from business. By belete jember phd belete jember bobe, phd fcca is a lecturer in accounting at the school of accounting, economics and finance, faculty of business and law, deakin university, australia. Ethiopian tax laws who is required to pay an income tax. Administrative procedure proclamation ethiopia covid19 workplace response protocol ministry of labor ethiopia. Withholding tax in ethiopia is viewed and administered according to the following legal documents. Employers must withhold the tax from each payment to an employee and pay the tax over to the tax authorities for each month. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties and domestic taxes. Wheras, it is found essential to make the tax system fair and bring income that. The month of nahase and pagumen shall be aggregated and treated as one calendar month.
In addition, the costs of vat administration were briefly examined in the case of jantschers 1990 study. Federal income tax proclamation whereas, it has become necessary to introduce modern and efficient tax system that supports the economic development and which is in accord with the level of economic development achieved so far. Categories of taxpayers administrative convenience requires classification of taxpayers into different groups at it is not possible to extend the same treatment to all taxpayers at the same time. This regulation is issued by the council of ministers pursuant to article 5 of the definition of powers and duties of the executive organs of the federal democratic republic of ethiopia proclamation no.
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