Tax regulations in ethiopia details written by administrator published on 30 april 2008 category. Unlike the previous excise tax law, the new excise tax proclamation has introduced a list of exempted items and transactions from the reach of the excise tax law regime. A complete and easy access to ethiopian legal information. Whereas, the value added tax minimizes the aamage that may be caused by. It aims at the prevention of crimes by giving due notice of the crimes and penalties prescribed by law and should this be. Pdf there have been significant social, economic and political changes in ethiopia in recent decades. The law applies a progressive tax rate, except for corporate tax, which is flat 30%. Tax law is a branch of public law that shares the attributes of legality principle. The 1995 ethiopian constitution and the ethiopian national harmful traditional practice strategy have denounced harmful traditional practices that are against. This guide provides vital information on ethiopian tax law and practice and is not intended to substitute professional advice given with full knowledge of the specific circumstances of each case and proficiency in the law of ethiopia such as might be provided by a tax attorney or tax lawyer in ethiopia. The law clearly provides the following this proclamation shall apply to residents of ethiopia with respect to their worldwide income. 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. In addition, the law has provided circumstances on which a given excisable good will be exempted from payment of excise tax.
If the person was present for 183 days in ethiopia within 12 months permanently or other way, the law regards him as an ethiopian resident and imposes. Accordingly, this teaching material tries to address, even though briefly, the basic component of tax law, especially in ethiopia. Accordingly, the material deals with the following. Different countries apply different rules in order to determine their tax jurisdiction. Ethiopian tax laws who is required to pay an income tax in.
By the tax authority, we mean the ethiopian revenues and customs authority erca head office or any of its branch offices established in any part of ethiopia and the tax authorities of the regional state. The direct and indirect taxes applicable in ethiopia. A word or term in these regulations shall have the same meaning that it has in the. The amharic version of the constitution has the final authority in the event of conflict between the english. The withholding agent is required to pay the withhold tax to the ministry of revenue within 30 days after the end of the month in which the withholding income was paid. Since the th century is has been the language of the court and dominant population in highland ethiopia. Constitution of the federal democratic republic of ethiopia, it is. The language of amharic is spoken in the ethiopian government, court system, and on all official documents. Since the jurisprudence of ethiopian taxation is yet to develop fully, this. Ethiopian source income except to the extent that it is attributable to. We are more accustomed to talking if ever about income taxes even then, of specific income taxes, the value added tax, or customs duties than of the ethiopian tax system as a whole. As important sources of public revenue, taxes are very important part of the daily functioning of a government. 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.
Income specifically exempted from income tax by the law in force in ethiopia, by international treaty or by an agreement made. However, the amount of income and the corresponding tax rate has been static for more than a decade, despite inflation. Freedom of mobility in an ethnicbased federal structure. Ethiopia introduced vat as a replacement to sales tax in the year 2003.
This is direct tax, which a person pays from any income he gets. The 2002 income tax proclamation governs income tax from employment, from rental of buildings and from business. Apr 30, 2008 tax regulations in ethiopia details written by administrator published on 30 april 2008 category. The new income tax in ethiopia new income tax calculations. Claim of right 1 a taxpayer who is accounting for tax purposes on a cash basis shall treat an amount as received and an outgoing or expense as paid, even though that person is not legally entitled to receive the amount or liable to make the payment, if that person claims to be. In this proclamation, the meanings of terms defined in other laws. If the amount of tax shown on a declaration understates the amount of tax required to be shown, the taxpayer is liable for a penalty in the amount of 10% of the understatement or. The amharic version of the constitution has the final authority in the event of conflict between. Fikadu asfaw and associates law office is a fullfledged corporate and commercial law firm in addis ababa, ethiopia with highly professional attorneys providing legal advice and services to clients throughout the surrounding areas of ethiopia as well as all around the world. Tax revenue to gdp ratio is very low in ethiopia as compared to some of subsaharan african countries. Ethiopia investment policies and incentives and opportunities. In ethiopian income tax law royalty is defined to mean, a payment of any kind received as a consideration for the use of, or.
Model by law for civil society organizations based on new law new hate speech prevention draft proclamation. Amharic version of ethiopian laws, imposes obligation only on tax payers by. Legality principle of taxation in ethiopia ssrn papers. Jul 08, 2016 as of the new budget year, which starts at hamle 2008 e. On this page you can read or download ethiopian criminal law amharic pdf in pdf format.
Ethiopian tax system strikes one as random, disorganized, and incoherent in places. If you dont see any interesting for you, use our search form on bottom v. Nov 24, 2015 on this page you can read or download ethiopian criminal law amharic pdf in pdf format. The ethiopian income tax law uses resident as a defining criteria in order to determine the tax jurisdiction of the country.
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. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties and domestic taxes. Whereas, the declaration on economic policy of the government of the federal democratic republic of ethiopia inaugurates a new era in social and economic relations and institutions. Tax regulations in ethiopia ethiopian business portal. It is an important and most significant source of revenue of the government. Equally, the law that obliges adoption agreement to be in written form, parties to appear before court of law and secure approval of the relation, is believed to be mechanical and contrary to.
Income tax proclamation ethiopian chamber of commerce and. The tax to be paid to the tax authority by the employers. Therefore, the user of this guide required to refer to the customs proclamation and other customs related laws and regulations for obtaining legally binding information. Valueadded tax vat or goods and services tax gst as termed in some countries has become a major tax instrument in a large number of countries worldwide. Amharic also known as abyssinian, amarinya, amarigna, and ethiopian is the national language of ethiopia.
Direct tax 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. Income tax regulation amharic clean resources1 mof. Income tax proclamation 782002 income tax regulation no. On this page you can read or download ethiopian criminal law pdf download amharic in pdf format. Apr 30, 2008 a withholding agent required to pay withholding tax must file a withholding tax declaration in the approved form with the payment.
Severance pay and compensation fikadu and associates law office. The 1995 ethiopian constitution and the ethiopian national harmful traditional practice strategy. Dont want to miss our interesting news and updates. Us imports 40% of ethiopian textile and garment exports uk imports 10% of ethiopias textile and garment exports other european countries import 50%. 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 fikadu. News about ethiopian civil servant salary and experience level. Whereas, it is believed that modernizing the tax system and broadening the tax base promotes economic growth by encouraging saving and investment. Whereas, in consequence of these developments, the existing system of income tax needs to be changed and adjusted to the basic principles of fiscal treatment in a free market economy. Income specifically exempted from income tax by the law in force in ethiopia, by international treaty or by an agreement.
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