Taxation in ethiopia in amharic pdf

Tax this page presents links to guide you on types of taxes, tax rates, exemptions, tax filing procedures and other information you need when you start up a business as a selfemployed person, a partnership or a limited company. Head office or any of its branch offices estblished in any part of ethiopia and the tax authorities of the. Income tax regulation amharic clean ministry of finance and. New car vehicle excise tax rate for new cars to be reduced from 30% to 5%. Dont want to miss our interesting news and updates.

The application of ethiopian transfer pricing rules on multinational enterprises. According to proclamation no 28694 any person whose permanent residence is in ethiopian, has to pay tax from the income that he gets within ethiopia or abroad. Taxation, borrowing and aid are not taken solely with reference to economics but also. This is direct tax, which a person pays from any income he gets. This study is, hence, to assess the vat withholding system in ethiopia and the implications for revenue collection and refunds. The capital city of the state of amhara is bahirdar. The constitution consists of 106 articles in 11 chapters. Ethiopian chamber of commerce ecc, ethiopian business development services network ebdsn, on behalf of. The sate of amhara is located in the north western and north central part of ethiopia. Consistency of the practice with the ethiopian transfer pricing rules. An ethiopian tax and customs law is characterized by frequent repeal and amendments. Ethiopia used income taxes as one of the principal sources of domestic government revenue since the beginning of modern taxation in the 1940s. Ethiopian ethiopian business chamber of commerce development services network chamber of crafts german technical cooperation hwk rheinmain, germany taxation in ethiopia direct and indirect taxes categories of tax payers declaration of income and assessment of taxes tax incentives addis ababa 12005. In addition to raising revenue, the mor is responsible to protect the society from adverse effects of smuggling.

Ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation. Introducing modern taxation system oct 04, 2012, ethiopian press agencythe ethiopian revenue and customs authority erca announced friday that etax training and implementation for a number of taxpayers is well underway. The new income tax in ethiopia new income tax calculations. Chapter two will introduce the students to the income tax in ethiopia. Double taxation agreements with ethiopia agreements. Income tax in ethiopia can be a burden, and you need to be sure you are placed in the correct tax brackets. Tax has been replaced by value added tax, and the overall taxation. The ethiopian income tax system is schedular in structure and orientation, the computation, assessment and collection of income. The current constitution of ethiopia, which is the supreme law of the federal democratic republic of ethiopia, came into force on 21 august 1995.

The number of proclamations, regulations and directives makes it to some extent difficult to understand this area of law. An individual, who stays in ethiopia for more than 183 days in a period of twelve 12 calendar months, either continuously or intermittently, shall be resident for the entire tax period. About the constitution of the federal democratic republic of ethiopia. Reports on books published in amharic, as well as on literature on ethiopia in general, are to be found in numerous issues of the rivista degli studi orientate and oriente moderno. Contractors in ethiopia are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties and domestic taxes. Some amharic sources for modern ethiopian history, 1889. Taxation in ethiopia direct and indirect taxes categories of tax payers declaration of income and assessment of taxes tax incentives addis ababa 12005 published by.

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. 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. Double taxation agreement between india and ethiopia. Pdf in most developing countries, income inequality tends to worsen during initial stages of growth, especially in urban areas. 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. First add all the payments in cash and in kind made to their employees in a month. C the ministry of finance and economic cooperation mofec has announced this new tax proclamation the new income tax proclamation has employees and low earners at its benefiters. Introduction about ethiopian taxation and accounting. Introduction about ethiopian taxation and accounting practice. Apr 2020 taxation in ethiopia latest ethiopian news.

All ethiopian languages shall enjoy equal state recognition. Done in duplicate at new delhi this 25th day of november, one thousand nine hundred and seventysix in the amharic, english and hindi languages, all the texts being equally authentic, except that in the case of divergence of interpretation the english text shall prevail. Income tax proclamation 782002 income tax regulation no. The 1 other indirect taxes mainly refer to excise taxes 2 world bank 2015, how to collect more and better revenue. So an individual foreigner, who lives in ethiopia for more than 183 days in a period of twelve calendar months, whether continuously or intermittently, is regarded as being resident for the entire tax period and is taxed in accordance with the provisions of income tax proclamation no.

Ethiopia is also a vavilov center of diversity for domesticated crops, including enset, coffee and teff. If the person is not resident of ethiopia gets his income which has its source in ethiopia also should pay tax. The direct and indirect taxes applicable in ethiopia. According to the new changes to be introduced to the amendment, an excise tax levy which was proposed on imported new vehicles cars with production dates not exceeding two years and with engine capacity of. Referconsult a tax schedule schedule that shows how much tax is owed for different amounts of income earned by the employee to find. It will start with a brief look at the history of income taxes in ethiopia and will go on to look at different concepts and definitions involved in income taxation. Pdf addis ababa university faculty of business and. As of the new budget year, which starts at hamle 2008 e.

Pdf since 1991, policies of economic liberalization in ethiopia have been effective in releasing the economy from rigid state control. Added tax proclamation, is not registered by reason of his. Tax regulations in ethiopia details written by administrator published on 30 april 2008 category. Amharic version of ethiopian laws, imposes obligation only on tax payers by saying. Tunisia trade agreemnet ratification proclamation no. In the case of a business located and operating in ethiopia as the branch, subsidiary or. Value added tax vat this is a sales tax based on the increase in value or price of product at each stage in its manufacture and distribution. The new ethiopian cabinet takes the oath of office file photo. An individual shall be resident in ethiopia, if he. It will start with a brief look at the history of income taxes in ethiopia and will go on to look at different. Taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. Valuedadded tax vat was introduced in january 2003 and may mean a shift from ethiopias dependence on foreign to domestic trade, but it is too. In ethiopia, employers can determine the tax to be withheld by following 3 key steps. The major types of taxes that exist in ethiopia, their meaning, rates and conditions, as provided by the federal inland revenue authority, are presented as follows.

This is in line with the commitment of the ethiopian revenues and customs authority erca, the government agency responsible for administering customs in ethiopia, to ensure transparent, reliable and predictable customs services. It seizes and takes legal action on the people and vehicles involved in the act of smuggling while it facilitates the legitimate. 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. Mscprogram value added tax vat withholding practices and challenges acknowledgment.

Tax revenue to gdp ratio is very low in ethiopia as compared to some of subsaharan african countries. In present study an attempt is made to analyze empirically the determinants of tax revenue and assess the response of tax revenue to changes in its. Apr 2020 business profit tax in ethiopia latest ethiopian news ethiopian business directory and product catalog. Amharic shall be the working language of the federal government. For these reasons, we believe that consideration of evasion, avoidance, and administration is essential to the positive and normative analysis of. The reform also introduced a 5 per cent tax rate for work contracts and financial services, while a 15 per cent rate is applied to the sale of other services. Income tax proclamation ethiopian chamber of commerce and. Employment income tax in ethiopia introduction individuals may receive various types of income such as wages or salary from employment, rent from letting houses or buildings, interest from lendingsaving money, and profit from their trading activities or business.