Subject to the prior secured claims of creditors, the authority has a preferential claim upon the assets of the person liable to pay the tax until the tax is paid from the date on which tax becomes due and payable under this proclamation. Federal income tax proclamation exclusive document. Tax compliance costs in etb and as a share of turnover by taxpayers ownership type and sector 17 table 3. Apr 30, 2008 income tax regulations, assessment and payment in ethiopia details written by administrator published on 30 april 2008 category. The tax system of ethiopia by peter schwab in 1966 emperor haile selassie i of ethiopia promulgated by executive decree a new tax law. In addition, principle of economy also requires the tax system to concert tax efforts on those taxpayers with high revenue potential. Rental income tax rates 1 the rate of rental income tax applicable to a body is 30%. Accordingly, the income tax proclamation has introduced four kinds of schedules. 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. Proclamation 4942006 to amend the labour proclamation. 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. A proclamation to amend the investment proclamation whereas it has become necessary to amend the investment proclamation no 7692012.
A comparative overview dasalegn mosissa jalata lecturer department of accounting and finance, college of business and economics, wollega university, post. Employers must withhold the tax from each payment to an employee and pay the tax over to the tax authorities for each month. Proclamation with responsibility for the administration and enforcement of the tax. Federal income tax proclamation wheras, 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. By abrham yohannes on april 12, 2020 leave a comment proclamation no. Taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. 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. Inhouse compliance cost of time spent on general bookkeeping and tax accounting in etb by ownership type and turnover 22.
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. Ethiopian legal information portal find laws, cases, legal. Proclamation, schedule c incomebusiness income tax. 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%. Usda pleased with ethiopian govt for its willingness to approve gmos ethiopia observer addis ababa introduces evenodd scheme to restrict private vehicles from roads protocol to the african charter on human and peoples rights on the rights of older persons in africa ratification proclamation no.
A reflection of problems 147 of filing and payments, refunds, audits and penalties. 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. Whereas, it has become necessary to amend the turnover tax proclamation n0. Nov 24, 2011 and article 117 i of the income tax proclamation as amended no. Turnover tax rate, computation, obligation and exemption. Federal income tax proclamation exclusive document from the. The national regional republic of ethiopia business income. Ethiopian revenue authority may raise vat withholding. 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. Whereas, it is believed that introducing the system of advance tax ruling helps.
Ethiopia to amend income tax proclamation a new draft bill has been. This page contains turnover tax rate in ethiopia, base of computation obligation, and exemption from tot in ethiopia. Now, therefore, in accordance with article 55 1 and 11 of. Tax reform discourse and its implication on development. Ethiopian revenue and customs authority establishment. Chapter two will introduce the students to the income tax in ethiopia. Whereas, the economic and social development of the country requires that transport service be regulated to make it more competitive, safe and efficient. Base of computation of the turnover tax shall be the gross receipt in respect of goods supplied or services rendered. May 07, 2016 ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation. Turnover tax is payable on goods and services supplied by persons who are not registered for. Employment income tax is a tax on the earnings of an employee. Tax on employment income used to be guided by income tax proclamation no. Though there is no constitutional distinction between bills subject to parliamentary legislation and those subject to executive declaration, parliamentary ratification has been, and continues to be. Mar 31, 2011 turnover tax amendment proclamation no.
Paragraph 18 states, taxable business income shall be determined per tax period on the basis of the profit and loss account or income statement, which shall be drawn in compliance with the general accepted accounting standards, subject to the provisions of this proclamation and the. Tax administration proclamation wheras, it is necessary to enact a separate tax administration proclamation governing the administration of domestic taxes with a view to render the tax administration system more efficient, effective and measurable. Ethiopian legal information portal find laws, cases. Turnover tax rate, computation, obligation and exemption in. Obligation to collect and transfer the turnover tax. A person who sells goods and services has the obligation to collect the turnover tax from the buyer and transfer it to the tax authority. 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. 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. There are specific tax rules, albeit brief, applicable to upstream petroleum activities set out in the. The following is the progressive rate table for monthly employment income. Whereas, it has become necessary to amend the income tax proclamation n0. A comparative overview dasalegn mosissa jalata lecturer department of accounting and finance, college of business and economics, wollega university, post box no. 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. Taxes and tax reform in ethiopia, 19902003 alemayehu.
Importing vehicle to ethiopia and dealing with ethiopia car import tax made easy for car importers and anyone coming to ethiopia. 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. Apr 25, 2016 importing vehicle to ethiopia and dealing with ethiopia car import tax made easy for car importers and anyone coming to ethiopia. Ethiopian revenue authority may raise vat withholding december 22, 2016 the growing number of requests for tax refunds is causing the government to consider increasing the withholding percentage from value added tax vat, reports capital. This regulation may be cited as the council of ministers income tax amendment regulation no. Ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation. Nov 23, 2012 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. Time spent on bookkeeping and tax accounting by ownership type and turnover 21 table 3. Oct, 2014 the value added tax and sales tax in ethiopia 1. Federal turnover tax law of 2002 to collect turnover taxes. Corporate tax in ethiopia is imposed at a standard rate of 30%. Tax administration proclamation draft ethiopian legal.
Dec 22, 2016 ethiopian revenue authority may raise vat withholding december 22, 2016 the growing number of requests for tax refunds is causing the government to consider increasing the withholding percentage from value added tax vat, reports capital. Accounting and tax corporate tax in ethiopia is imposed at a standard rate of 30%. The council of ministers income tax regulation no 782002 is here by amended as follows. This proclamation may be cited as the federal income tax proclamation no. In addition, the costs of vat administration were briefly examined in the case of jantschers 1990 study. Income tax regulations, assessment and payment in ethiopia. Establishment of the secretariat of the house of peoples representatives and of the house of the federation proclamation. Ethiopia tax rate for 20162017, 20152016, 20142015 ethiopia income tax rate 20152016. Public finance and taxation in ethiopia pdf in a moment of dismissive hubris, the ethiopian tax system may be. Ethiopia car import tax importing vehicle to ethiopia. Federal negarit gazeta establishment proclamation resources.