This page presents links to guide you on types of taxes, tax rates, exemptions, tax filing procedures and other informations you you need when you start up a business as a self-employed person, a partnership or a limited company. You will also find links to find additional help and support from the Ethiopian Ministry of Revenues. The page contains an article on the power of taxation in Ethiopia.
|Federal Income Tax Proclamation No. 979/2016 or 979/2008 (according to the Ethiopian calendar - EC)||DOWNLOAD|
|Tax Administration Proclamation No. 983/2016 or 983/2008 (according to the Ethiopian calendar - EC)||DOWNLOAD|
|Value Added Tax Proclamation No. 285/2002 or 285/1994 EC||DOWNLOAD|
|Valude Added Tax Amendment Proclamation No. 609/2008 or 609/2000 EC||DOWNLOAD|
|Excise Tax Proclamation No. 307/2002 or 307/1994 EC||DOWNLOAD|
|Excise Tax Amendment Proclamation No. 610/2008 or 610/2000 EC||DOWNLOAD|
|Turn Over Tax proclamation No. 308/2002 or 308/1994 EC||DOWNLOAD|
|Turnn Over Tax Amendment Proclamation No. 611/2008||DOWNLOAD|
|Council of Ministers VAT Regulation No. 79/2002 or 79/1994 EC||DOWNLOAD|
|Council of Ministers Regulation No. 410/2017 on The Federal Income Tax||DOWNLOAD|
|Council of Ministers Regulation No.407/2017 on Federal Tax Administration||DOWNLOAD|
|A directive to provide for assessment of tax based on estimation, Directive No. 138/2010 (E.C.)||DOWNLOAD|
|A directive to regulate tax clearance certificate, Directive No. 139/2010||DOWNLOAD|
|A directive to regulate cash register, Directive No. 110/2008||DOWNLOAD|
These Proclamations can be purchased at Berhanena Selam Printing Enterprise Shop at Arat Kilo. One can also visit http://www.erca.gov.et (the Ethiopian Revenues Ministry, that has taken over the responsibility of the former Ethiopian Regulations and Customs Authority, among othe things).
The various taxes are dealt with separately in other categories on this website (Value Added Tax (VAT), Income Tax, Turnover Tax (TOT), Withholding Tax, Excise Tax, Capital Gains Tax, Rental Tax, Royalty Tax, Sur Tax on Imported Goods, and Stamp Duty)
The following shows only the rates of the various types of tax in Ethiopia. To find out detailed descriptions and applicable exemptions, you can go to the respective categories of our website.
VAT (Value Added Tax): 15%
Excise Tax: varies widely for different goods and one may check the separate category for excise tax on this website.
TOT (Turnover Tax): 2% on goods sold locally; for services 2% (two percent) on contractor, grain mills, tractors and combine-harvesters and 10% (ten percent) on others
Personal Income Tax: progressive and ranges from 10% to 35%.
Rental Tax: progressive for persons and ranges from 10% to 35% and 30% flat rate on bodies.
Business Profit Tax: progressive for unincorporated businesses and ranges from 10% to 35% and 30% flat rate on incorporated businesses (eg. PLC, Share Company).
Withholding Tax: On imported goods at 3% of the sum of cost, insurance and freight (CIF). On payments made to taxpayers at 2% on cost of supply goods involving more than Birr 10,000 in any one transaction or contract and services involving more than Birr 3,000in one transaction or service.
Other Taxes (Taxes from Royalties, Income from Rendering Technical service, Income from Games of chance, Dividends, Income from Rental of property, Interest Income on deposits gain on trainer of certain In-properly)
Power of taxation in Ethiopia is given to the federal government, state government or concurrently for both central (federal) and state government.
Article 96 of the FDRE Constitution provides Federal Power of Taxation:
- The Federal Government shall levy and collect custom duties, taxes and other charges on imports and exports.
- It shall levy and collect income tax on employees of the Federal Government and international organizations.
- It shall levy and collect income, profit, sales and excise taxes on enterprises owned by the Federal Government.
- It shall tax the income and winnings of national lotteries and other games of chance.
- It shall levy and collect taxes on the income of air, rail and sea transport services.
- It shall levy and collect taxes on income of houses and properties owned by the Federal Government; it shall fix rents.
- It shall determine and collect fees and charges relating to licenses issued and services rendered by organs of the Federal Government.
- It shall levy and collect taxes on monopolies.
- It shall levy and collect Federal stamp duties.
Article 97 of the FDRE Constitution states State Power of Taxation:
- States shall levy and collect income taxes on employees of the State and of private enterprises.
- States shall determine and collect fees for land usufractuary rights.
- States shall levy and collect taxes on the incomes of private farmers and farmers incorporated in cooperative associations.
- States shall levy and collect profit and sales taxes on individual traders carrying out a business within their territory.
- States shall levy and collect taxes on income from transport services rendered on waters within their territory.
- They shall levy and collect taxes on income derived from private houses and other properties within the State. They shall collect rent on houses and other properties they own.
- States shall levy and collect profit, sales, excise and personal income taxes on income of enterprises owned by the States.
- Consistent with the provisions sub-Article 3 of Article 98, States shall levy and collect taxes on income derived from mining operations, and royalties and land rentals on such operations.
- They shall determine and collect fees and charges relating to licenses issued and services rendered by State organs.
- They shall fix and collect royalty for use of forest resources.
Article 98 of the FDRE Constitution provides cases of concurrent power of taxation:
- The Federal Government and the States shall jointly levy and collect profit, sales, excise and personal income taxes on enterprises they jointly establish.
- They shall jointly levy and collect taxes on the profits of companies and on dividends due to shareholders,
- They shall jointly levy and collect taxes on incomes derived from large-scale mining and all petroleum and gas operations, and royalties on such operations.
Article 99 of the FDRE Constitution has provided the case of undesignated power of taxation:
The House of the Federation and the House of Peoples' Representatives shall, in a joint session, determine by a two thirds majority vote on the exercise of powers of taxation which have not been 'specifically provided for in the Constitution. Accordingly levying and collection (taking the income) of VAT has been given to the Federal Government.