Heading tariff number description excise rate on value 1. In 20089 fiscal year, employment income tax amounting to 1. In addition to raising revenue, the mor is responsible to protect the society from adverse effects of smuggling. Apr 2020 excise tax in ethiopia latest ethiopian news. In line with this change, a series of tariff and tax reform measures have been taken. On the occasion, ethiopia s coffee brand logo has also been launched.
For alcohol products, such as wine and beer, the ministry designed a new formula for valuing the excise tax, according to. Income specifically exempted from income tax by the law in force in ethiopia, by international treaty or by an agreement made. A bill to the excise tax law has already reached the council of ministers. In simple terms custom duty is tax tax imposed on goods entering and leaving the country. The second edition of ethiopias international coffee event opened today at the millennium hall in addis ababa, ethiopia. On the occasion, ethiopias coffee brand logo has also been launched. 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. On february, 2020, the federal parliament approved a new excise tax proclamation no. Both the previous and the new proclamation indicates that the ethiopian tax excise tax regime prefers to combine the two types of excise tax methods. The new excise tax law has imposed a new tax on the profitable beverage industry.
An individual, who stays in ethiopia for more than 183 days in a period of twelve 12 calendar months, either continuously or intermittently, shall be resident for the entire tax period. Pdf overview of ethiopian excise tax hcbst 2016 amanuel. Definitions in this proclamation unless the context otherwise requires. 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. It is a tax levied on selected goods such as luxury goods and basic goods which are demand inelastic i. Apr 2020 new vehicle car excise tax rates in ethiopia latest ethiopian news ethiopian business directory and product catalog. The challenges of tax collection in developing economies. Excise tax in ethiopia is imposed and payable on selected goods, such as, luxury goods and basic goods which are demand inelastic. The principal taxes currently in place are company profit tax, turn over taxvalueadded tax vat, excise tax, customs duty, income tax. Based on the bill, a beer exclusively produced from barley, grown and malted in ethiopia, will be subjected to a 35 percent excise tax, while beer brands having the local raw material content of, excluding water, at least 75% by weight of its constituents will be subjected to 30 percent excise tax. Ethiopias excise tax regime has been in place for almost two decades. Data statistics south africa provided disaggregated cigarette price data, used in the calculation of the consumers price index.
Rate of excise tax the excise tax shall be paid on goods mentioned under the schedule attached to this proclamation. Introduction the effectiveness of excise tax increases as a tool for reducing tobacco consumption depends largely on how the tax increases impact the retail price. Tobacco excise tax systems are quite complex in several countries, where different tax rates are applied based on prices, product characteristics such as presenceabsence of a. Dec 21, 2019 based on the bill, a beer exclusively produced from barley, grown and malted in ethiopia, will be subjected to a 35 percent excise tax, while beer brands having the local raw material content of, excluding water, at least 75% by weight of its constituents will be subjected to 30 percent excise tax. The tax to be paid to the tax authority by the employers can be transmitted through financial institutions delegated by the authority or through electronically filing and payment system. Imposition of excise tax 1 subject to this proclamation, a tax, to be known as excise tax, shall be charged in accordance with the provisions of this proclamation on. The direct and indirect taxes applicable in ethiopia. An ethiopian tax and customs law is characterized by frequent repeal and amendments.
The effect of excise tax increases on cigarette prices in. For instance, goods such as cigarettes and alcohol are often taxed by the state or local authority, at a flat rate per item. Threebedroom 2080 program condominium winners list. Ethiopia drafts bill to amend excise tax law on alcoholic. It seizes and takes legal action on the people and vehicles involved in the act of smuggling while it facilitates the legitimate movement of goods and people.
Whereas, to improve government revenue it has become necessary to impose excise tax payable on selected goods. Hcbst 2016 abstract an ethiopian tax and customs law is characterized by frequent repeal and amendments. If you are a business company intending to open a new business here in ethiopia or an already established business, here is alist of taxes imposed on business companies operating in ethiopia the principal taxes currently in place are profit tax, turn over tax tot, valueadded tax vat, excise tax, customs duty and income tax from employment. List of taxes imposed on business companies operating in. In this chapter, we will focus on tax administration capacity and the key factors tax administrators should be aware of given these goals. Upto 500% excise tax proposed on secondhand cars ethiopian. Tax regulations in ethiopia get quick facts on ethiopias tax regulations now power of taxation. Based on the bill, a beer exclusively produced from barley grown and malted in ethiopia will be subjected to a 35% excise tax while a veer the local raw material content of which excluding water is at least 75% by weight of its constituents will be subjected to 30% excise tax. All you need to know about excise tax in ethiopia youtube. The direct and indirect taxes applicable in ethiopia fikadu. Employment income is one of the most well known forms of tax in ethiopia.
Moreover, it is believed that imposing the tax on goods that are hazardous to health and which are cause to social problem, will reduce the. Apr 2020 new vehicle car excise tax rates in ethiopia. Nov 21, 2019 ethiopia ethiopias ministry of finance has presented a bill to the council of ministers to amend the nations excise tax law in an effort to standardise taxation of alcoholic products, soft beverages and other luxury goods. China mining united investment group is set to build a multipurpose industrial village in addis ababa, ethiopia. Dec 29, 2019 all you need to know about excise tax in ethiopia surtax in ethiopia excise tax rate research on excise tax in ethiopia how to calculate excise tax types of tax in ethiopia ethiopian customs. Dec 17, 2015 excise tax in ethiopia is imposed and payable on selected goods, such as, luxury goods and basic goods which are demand inelastic. Dec 19, 2019 according to the preamble of the draft proclamation, revising the proclamation has become necessary to broaden the role and participation of the private sector in the economy and increase the capacity and finance of public enterprises for better development and competitiveness. The principal taxes currently in place are profit tax, turn over tax tot, valueadded tax vat, excise tax, customs duty and income tax from employment. The second edition of ethiopia s international coffee event opened today at the millennium hall in addis ababa, ethiopia. An excise tax is an indirect tax, usually paid by the manufacturer or retailer of the product, then passed along in the price of the product to the consumer. Draft excise tax proclamation ethiopian legal brief. This tax is added into the retail price, making it somewhat of.
If you are a business company intending to open a new business here in ethiopia or an already established business, here is alist of taxes imposed on business companies operating in ethiopia. Whereas, it has become necessary to amend the value added tax proclamation n0. Dutyfree irrigation, mechanization and animals feed. For this brief purpose, emphasis is given to the ad valorem aspect of the excise tax as it is the most important and widely used method of excise tax. It is also the responsibility of beer producers to put a stamp on every bottle to signify that they are paying excise tax. Ethiopia ethiopias ministry of finance has presented a bill to the council of ministers to amend the nations excise tax law in an effort to standardise taxation of alcoholic products, soft beverages and other luxury goods the new bill, which has been sent to the council of ministers for deliberation, will tax goods such as soft drinks based on the selling price to suppliers, albeit. List of taxes imposed on business companies operating in ethiopia.
Drafted by the ministry of finance, the new proclamation introduce. 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. Therefore, the new excise tax imposed on beer is 40% per bottle or 11 birr per liter. Excise tax is levied on selected items when produced locally or. Import tax to ethiopia addis ababa local business listing. Ethiopia drafts bill to amend excise tax law on alcoholic and. If the assessed valuation of the lot is to be increased by 20%, what will be the amount of taxes to be paid. An excise tax is an indirect tax charged on the sale of a particular good. Ethiopian ministry of revenues mor is the body responsible for collecting revenue from customs duties and domestic taxes. Excise tax proclamation 3072002 section two the rate, base and payment of excise tax 4. Draft excise bill to tax imported cars in ethiopia the. Moreover, it is believed that imposing the tax on goods that are hazardous to health and which are cause to social problem, will reduce the consumption of such goods.
Taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. Update on ethiopias new excise tax proclamation africa. Since 199293, the government of ethiopia has made a major economic policy shift from central planning to market oriented economic system. The challenges of tax collection in developing economies with special reference to india pramod k. Excise tax proclamation no 3072002 or 3071994 ec and its amendment proclamation no. We estimate this relationship in south africa for 20012015. Apr 11, 2011 taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. According to the new changes to be introduced to the amendment, an excise tax levy which was proposed on imported new vehicles cars with production dates not exceeding two years and with engine capacity of 0 horsepower and less was to be reduced from 30 percent down to 5 percent, according significant cost advantage to local car assembles and new car importers. So an individual foreigner, who lives in ethiopia for more than 183 days in a period of twelve calendar months, whether continuously or intermittently, is regarded as being resident for the entire tax period and is taxed in accordance with the provisions of income tax proclamation no. Whereas, it is believed that this tax should be imposed on luxury goods and basic goods which are demand inelastic. How employers can determine the tax to be withheld. Property taxation and excise tax math mingle school of real estate 2016 3 e. Ethiopia country procurement assessment report, june 28, 2002.
Excise tax is one of the most well known forms of tax in ethiopia. Indirect means the tax is not directly paid by an individual consumer. Ethiopia at risk of yellow fever outbreak, who says. The number of proclamations, regulations and directives makes it to some extent difficult to understand this area of law. Ethiopia has a federal structure of government comprising of the federal government and nine 9 autonomous states vested with powers of selfadministration under the 1995 constitution. Ethiopia s excise tax regime has been in place for almost two decades. An individual shall be resident in ethiopia, if he. All you need to know about excise tax in ethiopia surtax in ethiopia excise tax rate research on excise tax in ethiopia how to calculate excise tax types of tax in ethiopia ethiopian customs. The major tax reforms in ethiopia occurred in the 1940s, in the aftermath of the ethiopian revolution of 1974, after the. Short title proclamation may be cited as the chat excise tax proclamation no.