2merkato

Tata International, the global trading and distribution arm of diversified Tata Group, plans to enter Ethiopian market in 2016, The Daily Monitor reported.

Tax appeal in Ethiopia is dealt with based on the following legal documents.

According to article 53 of the Federal Tax Administration Proclamation (hereinafter the proclamation), except in proceedings under Part 9 of the Proclamation a tax or appealable decision is final and conclusive, and cannot be disputed in the Tax Appeal Commission (hereinafter the Commission) or a Court, or in any other proceedings on any ground whatsoever. The proceedings under Part 9 of the proclamation include:

1. Notice of Objection to a Tax Decision

A taxpayer dissatisfied with a tax decision may file a notice of objection to the decision, in writing, with the Authority within 21 (Twenty-one) days after service of the notice of the decision. A notice of objection is valid only upon the fulfillment of the following conditions:

1.  the notice of objection states precisely the grounds of the taxpayer’s objection to the tax decision, the amendments that the taxpayer believes are required to be made to correct the decision, and the reasons for making those amendments;
2. when the objection relates to a tax assessment, the taxpayer must pay any tax due under the tax assessment that is not disputed by the taxpayer in the objection; and
3. Full payment of the disputed tax amount if a taxpayer prefers to pay the tax assessed on protest. 

When the Authority considers that a notice of objection filed by a taxpayer has not been validly filed, the Authority is obliged to immediately serve written notice to the taxpayer. The notice of objection will lapse unless a valid objection is filed by the later of 21 (Twenty-one) days from the date of service of the notice of the tax decision to which the objection relates; or 10 (Ten) days from the date of service of the notice of refusal.

A taxpayer may apply, in writing and before the end of the objection period stated above to the Authority for an extension of time to file a notice of objection. Such application for extension is only accepted if the Ministry of Revenue is satisfied that the reason for extension owes to an absence from Ethiopia, sickness, or other reasonable cause.

TOP

2. Tax Review Departments

The proclamation compels the Ministry of Revenue to establish a review department as a permanent office within the Ministry. The review department must provide for an independent review of objections validly filed under article 54 of the Proclamation. However, the department doesn’t render binding decision rather make recommendations to the Ministry as to the decision to be taken on an objection. 

TOP

3. Tax Appeal Commission

The proclamation establishes the Tax Appeal Commission which is accountable to the Prime Minister. A person dissatisfied with the decision of the Ministry (after the review by the Review Department), may appeal an appealable decision after fulfilling the following conditions:

1. File a notice of appeal (which includes a statement of reasons for an appeal) against the decision with the Commission in the approved form and within 30 (Thirty) days after the service of notice of the Ministry’s decision to the tax payer. However, the Commission may, on an application in writing and if good cause is shown, extend the time for lodging a notice of appeal.
2. The taxpayer should effect a payment of 50% of the tax in dispute under the tax assessment to the Ministry. The term “tax in dispute” excludes penalty and late payment interest payable in respect of the disputed tax.

After the notice of appeal is accepted, the Commission will hear and determine an appeal and make a decision. Noteworthily, if the aggrieved taxpayer fails to appear in person/ represented during the hearing session the commission may dismiss the appeal.

The decision of the commission may affirm, vary or set aside the decision, or remit the decision to the Ministry for reconsideration in accordance with the directions of the Commission.

TOP

4. Appeal to the Federal High Court

A party to a proceeding before the Commission who is dissatisfied with the decision of the Commission may, within 30 (Thirty) days after being served with notice of the decision, file a notice of appeal to the Federal High Court. The Federal High Court may, on an application in writing by a party to a proceeding before the Commission, extend the time for lodging a notice of appeal.

A notice of appeal to the Federal High Court by a taxpayer in relation to an objection to a tax assessment is treated as validly filed only if the taxpayer has paid 75% of the tax in dispute under the assessment. Furthermore, an appeal to the Federal High Court must be only made on a question of law which should be stated in the notice of appeal.

After application of the notice of appeal, the Federal High Court hears the appeal and may:

1. decide to affirm the decision of the Commission;
2. decide to set aside the decision of the Commission which either substitute or remit (for reconsideration in accordance with the directions of the court) the decision of the Commission.
3. decide to dismiss the appeal; or
4. make any other decision the court thinks appropriate.

TOP

5. Appeal to the Federal Supreme Court

A party to a proceeding before the Federal High Court who is dissatisfied with the decision of the Federal High Court may, within 30 (Thirty) days after being served with notice of the decision, file a notice of appeal to the Federal Supreme Court. The Federal Supreme Court may, on an application in writing by a party to a proceeding before the Federal High Court, extend the time for lodging a notice of appeal.

TOP

6. Burden of Proof

In the above proceedings in relation to a tax decision, the burden of proof lies on the taxpayer to prove that the tax decision is incorrect.

TOP

7. Implementation of Decision of Commission or Court

The Ministry shall, within 30 (thirty) days after being served with notice of the decision of the Tax Appeal Commission, Federal High Court, or Federal Supreme Court, take such action, including serving the taxpayer with notice of an amended assessment, as is necessary to give effect to the decision.

TOP

The Ethiopian Revenues and Customs Authority plans to raise more than 101 billion birr in this budget year from domestic taxes, duty taxes, customs and tax revenues.

The projected revenue, although significantly higher than previous revenue, is not over ambitious as it translates to just 11.54% of the Gross Domestic Product according to Melaku Fenta, Director General of ERCA.

The authority is preparing to meet the projection and plans to continue its efforts to broaden its tax-base, enforce the use of cash register machines and improve the capacity of the tax system and of its personnel he said.

The Ethiopian Revenue and Customs Authority affirmed that the tax levied on undistributed dividend applies to private limited companies and share companies.

The authority contradicted the claims made about the legality of the tax by members of the business community claiming that the tax proclamation served as the framework for the application.

The authority will enforce the payment of ten percent of accumulated net profit earmarked for distribution amongst shareholders even if it remains undivided said Melaku Fenta, Director of the ERCA speaking at meeting he had with members of the business community protesting the law last Saturday.

The first phase of the expansion work on the taxiway of the Bole International Airport, Ethiopia was completed said the Ethiopian Airports Enterprise. The project was completed at a total cost of 1.1 billion birr.

The expansion project was intended to enhance the airport’s capacity to meet air traffic flow said Wondim Teklu, Head of Public Relations and Communications Service with the EAE.

Bole International Airport is able to offer service to 34 aircraft simultaneously following the completion of the first phase of expansion. The airport currently services up to 110 aircraft a day making it one of the busiest airports in East Africa according to sources.