Employment income tax is a tax on the earnings of an employee. Federal negarit gazeta establishment proclamation resources. 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. Relation with other laws any previous laws inconsistent with this proclamation shall not be applicable with respect to matters provided for in this proclamation. The custom value of the goods under ethiopian customs law is the actual cost of the. Prevention and suppression of terrorism crimes proclamation. This proclamation may be cited as the investment amendment proclamation no. 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. Federal tax administration proclamation 4 19 manager means. Defination of powers and duties of the executive organs of the fdre. Accounting and tax corporate tax in ethiopia is imposed at a standard rate of 30%.
Federal income tax proclamation exclusive document from the. Termination of contract of employment under ethiopian law. Corporate tax in ethiopia is imposed at a standard rate of 30%. Ethiopian legal information portal find laws, cases. Withholding agent means a person liable to withhold tax from a payment. 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. Update on ethiopias new excise tax proclamation africa legal. The month of nahase and pagumen shall be aggregated and treated as one calendar month. Ethiopian legal information portal find laws, cases, legal. A reflection of problems 147 of filing and payments, refunds, audits and penalties.
This proclamation may be cited as the value added tax proclamation no. Employers must withhold the tax from each payment to an employee and pay the tax over to the tax authorities for each month. Po box 2189 ormond beach, florida 321752189 usa tel. 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. However, the amount of income and the corresponding tax rate has been static for more than a. 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. Administrative procedure proclamation ethiopia covid19 workplace response protocol ministry of labor ethiopia. The 2002 income tax proclamation governs income tax from employment, from rental of buildings and from business. Federal income tax proclamation exclusive document. Hate speech and disinformation prevention and suppression proclamation. In simple terms custom duty is tax tax imposed on goods entering and leaving the country.
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%. This article was first published in accas accountancy futures, edition 9 september 2014, accessible at. According to this proclamation the contract of employment may be terminated by the following different reasons. Establishment of the secretariat of the house of peoples representatives and of the house of the federation proclamation. Income tax proclamation ethiopian chamber of commerce and. The use of the machines at a regional level got underway in 201011.
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. 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. Ethiopia has a new tax proclamation that sees a significant. A term used in this proclamation that is defined in the tax. Mar 24, 2009 customs duty, tariff and taxes in ethiopia details written by administrator published on 24 march 2009 category. Consequently, a person will be considered to have a permanent establishment if he has. In addition, principle of economy also requires the tax system to concert tax efforts on those taxpayers with high revenue potential. 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.
Advances in ethiopias accountancy infrastructure, regulation. 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. Withholding tax in ethiopia is viewed and administered according to the following legal documents. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties and domestic taxes. 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. 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. Eshetu alemu, judgment and sentence unofficial english translation. Nov 06, 20 3 of the mining income tax proclamation no. A permanent establishment is defined in article 2 9 of the income tax proclamation. 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. 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. Chapter two will introduce the students to the income tax in ethiopia. Ethiopian ethiopian business chamber of commerce development services network taxation.
May 07, 2016 ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation. May 2020 ethiopian revenue and customs authority erca. The government collects this tax from any individual employees, other than. Head office or any of its branch offices estblished in any part of ethiopia and the tax authorities of the. 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. In a moment of dismissive hubris, the ethiopian tax system may be described as a loose agglomeration of proclamations, regulations, directives, rules, etc. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties. However, the amount of income and the corresponding tax rate has been static for more than a decade, despite inflation. 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.
Originally from ethiopia, he chairs the australia and new zealand acca members panel. Simachew kebede, the major shareholder of dh simex plc that owns intercontinental addis hotel. Apr 30, 2008 withholding tax in ethiopia is viewed and administered according to the following legal documents. 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. In ethiopia the employment relationship between an employer and an employee is governed by the ethiopian labor proclamation 3772003. Taxation in ethiopia direct and indirect taxes categories of tax payers declaration of income and assessment of taxes tax incentives addis ababa 12005. Apr 11, 2011 taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. A proclamation to amend the value added tax proclamation. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from. This proclamation may be cited as the federal income tax proclamation. Ethiopian tax laws who is required to pay an income tax in. Ethiopian tax laws who is required to pay an income tax. The following is the progressive rate table for monthly employment income.
Ethiopia to amend income tax proclamation a new draft bill has been prepared to amend the existing income tax proclamation. Public finance and taxation in ethiopia pdf in a moment of dismissive hubris, the ethiopian tax system may be. Whereas, it is found essential to make the tax system fair and bring. Item type current location collection call number copy number status date due barcode. Effective date this proclamation shall enter into force as of the 7th day of july, 1997. This proclamation may be cited as the federal income tax proclamation no. 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.