Npublic finance and taxation in ethiopia pdf

Pdf ethiopias new financial sector and its regulation. Ethiopian value added tax law, which authorizes the ministry of finance to exempt supplies from. This study investigates the financial performance the ethiopian banking sector using tof he panel data set for the period 200405 200910. Value added tax is a recent addition to the tax regime in ethiopia. The country financial accountability assessment cfaa for ethiopia was undertaken between april 2001 and november 2002, culminating in the in country mission carried out over a threeweek period in september and early october 2002 by a joint team of federal govemment of ethiopia officials, world bank staff, and a number of donorfunded.

Referconsult a tax schedule schedule that shows how much tax is owed for different amounts of income earned by the employee to find. Ethiopia accounting and auditing rosc page 1 reports on observance of standards and codes ethiopia accounting and auditing november 2007 contents executive summary i. Value added tax vat this is a sales tax based on the increase in value or price of product at each stage in its manufacture and distribution. Valuedadded tax vat was introduced in january 2003 and may mean a shift from ethiopias dependence on foreign to domestic trade, but it is too. A reflection of problems wollela abehodie yesegat abstract this paper examines vat administration in ethiopia and identifies key problems including lack of sufficient number of. The article covers the prehistory and history of ethiopia from its emergence as an empire under the aksumites to its current form as the federal democratic republic of ethiopia as well as the history of other areas in what is now ethiopia such as the afar triangle. The companies are experts in ethiopia taxation, and theyll ensure that you keep the largest proportion of your earnings whilst complying with local laws. On this page, you can find the rate of vat in ethiopia, voluntary and obligatory registration of vat in ethiopia, zero rate vat in ethiopia, and vat on imported goods. The ethiopian empire abyssinia was first founded by ethiopian people in the ethiopian highlands. Ethiopia corporate tax rate 20042020 data 20212022. In the case of a business located and operating in ethiopia as the branch, subsidiary or associated company of a business located and operating abroad, no payment of any kind made to the holding or associated company of the business in ethiopia shall be accepted as deduction from gross income in calculating the taxable income unless. Taxation in ethiopia direct and indirect taxes categories of tax payers declaration of income and assessment of taxes tax incentives addis ababa 12005. But evidences indicated that developing countries are not financing their development mainly from taxation. Neway gobachew, kenenisa lemie debela, woldemicael shibiru.

As a federal country, the functions and duties of the government are divided between central and state governments and they are generally defined in the constitution. The impact of tax reform on private sector development acknowledgement the draft report on the impact of tax reform on private sector development was prepared by ato amin abdella based on an earlier draft written by ato beyene bekele of tademcos consulting. The impact of tax reform on private sector development. Trading economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators. Multiple choice questions write the letter corresponding to the correct answer in the space to the left of the question. Public finance and taxation public finance and taxation reforms. 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. African business insights provides premium content, resources, tools, insights, and strategy for doing business and investing in africa. Government needs to be accountable in its use of public money and in providing effective, efficient, and economical service delivery. Gupta, alka, public finance and tax planning, first edition anmol publications. Ethiopia corporate tax rate data, historical chart, and calendar of releases was last updated on february of 2020 from its official source. Tax, public finance, ethiopian taxation, direct tax and indirect. Ethiopias public finances are under great budgetary pressure, as years of war and poverty have taken a heavy toll on the countryside, population, and infrastructure. Ethiopia operating costs and compliance by wollela abehodie 2009 and the influence of tax education on tax compliance attitude by zelalem berhane 2011, even these were not fully covering the problem at hand in all income tax payers in the country tax payers category a.

Business income the characterization of an amount as business income is important in both schedular and global income tax systems. In the process of development, states not only increase the levels of tax ation, but also undergo pronounced changes in patterns of taxation, with increasing emphasis on broader tax bases, i. The email address is not made public and will only be used if you wish to receive a new password or wish to receive certain news or notifications by email. The first deals with broad public finance topics such as aggregate fiscal management, efficient allocation of public spending, revenue. However, whilst the budget process is well ordered and. All emails from the system will be sent to this address. M an economic analysis of fiscal federalism in ethiopia 5 of taxation power identifies the following main criteria in assignment process. The law of corporate taxation in ethiopia ethiopian. Reports on observance of standards and codes rosc is a world bank and imf joint initiative that helps member countries strengthen their financial systems by improving compliance with internationally recognized standards and codes of best practice.

The model places crucial emphasis on stateowned enterprises soes to finance and manage public infrastructure development investments. Introduction every government need revenue to lead the economic, infrastructure, medical, transport, education, telecom, electricity, staff, research, to concession, subsidies, free facility for the unable sector community in the. In ethiopia various efforts aimed at obtaining optimal fiscal policies with emphasis on the role of taxation as an instrument of economic development has been implemented alemayehu and abebe. Here are the highlights of the value added tax proclamation and regulation. Lecture 3public finance in ethiopia public finance. 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. As we are all know that taxation can be classified into direct and indirect taxes. On the one hand, there are many sources of finance including taxation, external loans and assistance, price policy and domestic borrowing. Department of accounting and finance, addis ababa university, ethiopia. The corporate tax rate in ethiopia stands at 30 percent. Corporate taxation typically imposes a tax on the income of certain types of business organizations and also taxes the profits distributed to the holders of the ownership interests.

Pdf public finance and taxation yonas moges academia. The role of internal audit in public financial management. Value added tax registration, rates, and exemptions in ethiopia. Value added tax registration, rates, and exemptions in. Dont want to miss our interesting news and updates. Ethiopia public finance the ethiopian fiscal year begins 8 july, in the ethiopian month of hamle. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext.

In such a desire of government in sectors financial management, internal audit plays a valuable role by providing both assurance and consulting service. Chapter two will introduce the students to the income tax in ethiopia. In addition, the costs of vat administration were briefly examined in the case of jantschers 1990 study. Despite the fact that people need to pay taxes based on rationales of. Constitution of the republic of the union of myanmar. The partnership taxation model, on the other hand, taxes the income derived by the organization directly to the owners whether or not distributed.

Country financial accountability assessment ethiopia. Fikadu asfaw and associates law office falo on 11 apr 2011 related to taxes and accounting in ethiopia. As a result, they routinely raise finance needed for operation from iqqub schemes financial. Though there is no constitutional distinction between bills subject to parliamentary legislation and those subject to executive declaration, parliamentary ratification has been, and continues to be.

Ongoing financial reforms, particularly to develop a capital market, will enhance domestic resource mobilization. Chapter 16, taxation of income from business and investment 2 ii. Tax, public finance, ethiopian taxation, direct tax and indirect tax jel classification. Ethiopia is the successful case of a country with similar starting conditions as myanmar that. Fiscal federalism federalism is a system of government in which there is division of powers and functions between federal government and several regional governments, each of which in its own sphere coordinates with the others and each of which acts directly on the people through its administrative machinery. The study shows the prominent role played by iqqub schemes in ethiopia in terms of providing interestfree financial loans to entrepreneurs who cannot borrow money from formal money lending institutions such as the commercial bank of ethiopia. You must answer all components of all three parts of the exam. System of division of revenue in ethiopia alefe abeje belay lecturer, bahir dar university, ethiopia abstract in addressing the issue of the allocation of revenue raising powers, the main question is the taxation power distributed between the tiers of government in a federal system. Ethiopias publicprivate partnership framework will diversify the countrys development finance sources, improve debt sustainability, and sustain growthgen erating infrastructure investments. Ethiopias public finance management system has shown improvement over the period 2007 to 2010, according to standardised assessments. The tax system of ethiopia by peter schwab in 1966 emperor haile selassie i of ethiopia promulgated by executive decree a new tax law. Determinants of tax revenue in ethiopia neway gobachew, kenenisa lemie debela, woldemicael shibiru department of accounting and finance, jimma university, jimma, ethiopia email address. Ethiopian taxation system is very important for raising income of the government. Referconsult a tax schedule schedule that shows how much tax is owed for different amounts of.

Every government need revenue to lead the economic, infrastructure, medical. The principal taxes currently in place are company profit tax, turn over taxvalueadded tax vat, excise tax, customs duty, income tax from employment and income tax from business. It will start with a brief look at the history of income taxes in ethiopia and will go on to look at different concepts and definitions involved in income taxation. The major types of taxes that exist in ethiopia, their meaning, rates and conditions, as provided by the federal inland revenue authority, are presented as follows. Tax system of ethiopia it is clear from the land tax proclamation that the landowner is the. 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 50% if the understatement is considered substantial. The financial performance of the ethiopian banks has been evaluated using the volume of deposit, bank assets. Intoduction to public finance and taxation theory public finance is the term, which has traditionally been used or applied to the packages of those policy problems, which involve the use of tax.

Taxes and tax reform in ethiopia, 19902003 unuwider. The law of corporate taxation in ethiopia ethiopian legal brief. Gross national income for ethiopia mktgnieta646nwdb fred. The ethiopian economy is still largely on subsistence level, and in spite of some progress made, ethiopia has only taken the very first steps towards economic and social development. It forms the basis for policy focused analyses and sustained dialogue that. This paper assesses the treatment of corporate taxation in the ethiopian tax law and argues that the corporate tax issues are not properly addressed in a manner that attracts corporate business. The reform also introduced a 5 per cent tax rate for work contracts and financial services, while a 15 per cent rate is applied to the sale of other services.

Tax is very important for each and every government. Taxes on land and property have both fiscal and nonfiscal. Introduci1on for a number of poor african countries a central economic management problem today is how to finance agricultural expenditures. Apr 30, 2008 tax regulations in ethiopia details written by administrator published on 30 april 2008 category. General government revenue, expenditures and fiscal deficit. They can deal with any issues with the ethiopian tax office or tax department directly including processing your tax refund if you are eligible. Public finance and taxation in ethiopia pdf in a moment of dismissive hubris, the ethiopian tax system may be. Item type current location collection call number copy number status date due barcode. Taxpayers moral and compliance behavior in ethiopia. In the case of a business located and operating in ethiopia as the branch, subsidiary or. A reflection of problems 147 of filing and payments, refunds, audits and penalties. In ethiopia, employers can determine the tax to be withheld by following 3 key steps.

Dec 20, 2019 graph and download economic data for gross national income for ethiopia mktgnieta646nwdb from 1981 to 2018 about ethiopia and gni. Lecture 3 public finance in ethiopia free download as word doc. First add all the payments in cash and in kind made to their employees in a month. The taxation of business organizations generally falls into two basic modelscorporate taxation and partnership taxation. An economic analysis of fiscal federalism in ethiopia. Taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. Lecture 3public finance in ethiopia public finance bonds. Taxation in which there is a vat element is also part of the governments fiscal policy because one type of tax imposed by the government is value added tax vat. The country financial accountability assessment cfaa for ethiopia was undertaken between april 2001 and november 2002, culminating in the incountry mission carried out over a threeweek period in september and early october 2002 by a joint team of federal govemment of ethiopia officials, world bank staff, and a number of donorfunded. Ethiopia has chosen the federal structure in which a clear distinction is made between the union and state functions and sources of revenue, but residual powers, belong to the center, although the states have been assigned certain taxes, which are levied and collected by them, they also share in the revenue of certain federal taxes. The impact of tax reform on private sector development acknowledgement the draft report on the impact of tax reform on private sector development was prepared by ato amin abdella based on an earlier draft written by ato beyene bekele of tademcos. The federal democratic republic of ethiopia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income note this agreement was signed on 24 august 2016. Financial performance of the ethiopian banking sector.

An introduction into public finance and taxation issues for. Introduction following this brief introduction, part ii of this paper sets out briefly the rationale for taxing land and property, both as a source of local government revenue and in terms of its effects on efficient land use. Sep 19, 2011 the partnership taxation model, on the other hand, taxes the income derived by the organization directly to the owners whether or not distributed. Simulations of safety net financing in ethiopia from 20152019.

Tax regulations in ethiopia details written by administrator published on 30 april 2008 category. On recognizing the same, the department of accounting and finance, fbe, addis ababa university has introduced the course public finance and taxation for. The majority of small and medium sized enterprises in ethiopia experience lack of access to finance on favourable terms from formal money lending institutions such as commercial banks. However, the agreement is not yet ratified and therefore does not have the force of law.