The federal legislature of Ethiopia, House of Peoples’ Representatives (HPR), promulgated a new income tax law today July 26, 2016.

The new bill stipulates, among other issues, a new income tax rates which will be applicable to different types of incomes. According to Fana Broadcasting Corporate (FBC) the law is going to be effective from July 8, 2016.

The new income tax rate is going to be as follows:

Employment income per month      Income tax rate

0-600                                                 0%
6001-1,650                                        10%
1,651-3,200                                       15%
3,201-5,250                                       20%
5,251-7, 800                                      25%
7,801-10,900                                     30%
Over10,900                                        35%

The proclamation also includes tax on rented houses and enterprises. According to FBC, the amendment is as follows:
Rent income per month     Income tax rate

0 - 7,200                           0%
7,201 - 19,800                 10%
19,801 - 38,400               15%
38,401 -  63,000              20%
63,001-93,600                 25%
93,601 - 130,800             30%
Over 130,800                   35%

In addition to this the House has also endorsed 4 other proclamations. Among these bills one is the Revised Tax Administration. Another proclamation relevant for the business community passed today is Business Registration and Licensing Proclamation.

The other 2 proclamations are regarding geothermal resource development and an amendment to the auditor general office establishment proclamation.

Source: Fana Broadcasting Corporate