Npublic finance and taxation in ethiopia pdf files

Unuwider also acknowledges the financial contributions to the research programme by. 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. 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 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. Taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. 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. However, the agreement is not yet ratified and therefore does not have the force of law. Simulations of safety net financing in ethiopia from 20152019. The first deals with broad public finance topics such as aggregate. 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. 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.

The partnership taxation model, on the other hand, taxes the income derived by the organization directly to the owners whether or not distributed. The current state of ethiopian financial sector and its regulation. 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. A reflection of problems 147 of filing and payments, refunds, audits and penalties. Abeje belay 2014, system of division of revenue in ethiopia, european. Lecture 3public finance in ethiopia public finance bonds. African business insights provides premium content, resources, tools, insights, and strategy for doing business and investing in africa. What is new after a decade and half strategy of gradualism in reform, 20012017 working paper pdf available. In ethiopia, employers can determine the tax to be withheld by following 3 key steps. The taxation of business organizations generally falls into two basic modelscorporate taxation and partnership taxation. 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 budget has become the powerful instrument for fulfilling the basic objectives of government. Financial performance of the ethiopian banking sector.

Ethiopias public finance management system has shown improvement over the period 2007 to 2010, according to standardised assessments. 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 country financial accountability assessment cfaa is a diagnostic tool designed to enhance knowledge of financial accountability arrangements in the public and private sectors in client countries, to be used by the govemment of the country concerned, and other donors. Based on the above taxation, it can be classified into different degrees of progression. Investment guide for ethiopia business environment investment policy investment areas incentivesguarantees taxation investment opportunities investment procedures addis ababa, ethiopia january 2004 published by. What is new after a decade and half strategy of gradualism in reform, 20012017 working paper pdf available february 2017. 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. 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. Ethiopia accounting and auditing rosc page 1 reports on observance of standards and codes ethiopia accounting and auditing november 2007 contents executive summary i. Apr 11, 2011 taxation in ethiopia in ethiopia a company, based on its activities may be required to pat the following taxes. 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. On this page you can read or download ethiopian public finance exam with answer in pdf in pdf format. Country financial accountability assessment ethiopia. Department of accounting and finance, addis ababa university, ethiopia.

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. Ethiopian business development services network ebdsn p. Every government need revenue to lead the economic, infrastructure, medical. Public revenue public revenue refers to different sources of governments income. Tax directivesministry of finance and economic cooperation. In the case of a business located and operating in ethiopia as the branch, subsidiary or. Item type current location collection call number copy number status date due barcode. Coming in the heels of the food and fuel crisis from which ethiopia was just beginning to. The ethiopian government revenue is broadly divided into three. The budget reflects what the government intends to do. 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.

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. Each subfederal government is responsible for the provision of public services at its. The ethiopian empire abyssinia was first founded by ethiopian people in the ethiopian highlands. Introduci1on for a number of poor african countries a central economic management problem today is how to finance agricultural expenditures. An economic analysis of fiscal federalism in ethiopia. The goals of public finance are to recognize when, how and why the government should intervene in the current economy, and also understand the possible outcomes of making changes in the market. In addition, the costs of vat administration were briefly examined in the case of jantschers 1990 study. 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. Chapter 16, taxation of income from business and investment 2 ii. Ethiopia public finance the ethiopian fiscal year begins 8 july, in the ethiopian month of hamle. Pdf public finance and taxation yonas moges academia. Tax is very important for each and every government. For unincorporated or individual businesses the business income tax ranges from 10% 35%. Oct 14, 2019 public finance can be defined as the study of government activities, which may include spending, deficits and taxation.

Tax regulations in ethiopia details written by administrator published on 30 april 2008 category. If you dont see any interesting for you, use our search form on bottom v. Federal government of ethiopia ministry of finance and. To meet this objective, time series macroeconomic data on gdp, vat, total tax revenue excluding vat, nontax revenue and foreign revenue were used. This was followed by this indepth access to finance in ethiopia study. Due to myanmars human rights records and the related international sanctions, foreign aid and. Apr 30, 2008 tax regulations in ethiopia details written by administrator published on 30 april 2008 category. Corporate tax in ethiopia is imposed at a standard rate of 30%. Pdf the current state of ethiopian financial sector and. M an economic analysis of fiscal federalism in ethiopia 5 of taxation power identifies the following main criteria in assignment process. 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 tax revenue includes income taxes, vat, tot, excise tax, custom duty, and stamp duty. 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.

Multiple choice questions write the letter corresponding to the correct answer in the space to the left of the question. Determinants of tax payers voluntary compliance with. Taxpayers moral and compliance behavior in ethiopia. They are proportional tax, progressive tax, regressive tax and degressive tax.

Apr 08, 2011 tax directivesministry of finance and economic cooperation of ethiopia by abrham yohannes on april 8, 2011 18 comments tax on partially produced skin for export. The law of corporate taxation in ethiopia ethiopian. Lecture 3 public finance in ethiopia free download as word doc. 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. Thus, this paper analyses the role of vat on economic growth of ethiopia from 2003 to 2012 based on theoretical and empirical evidences. 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. Evolution of propoor finance after economic liberalisation in 1994, poverty and food insecurity led the government of ethiopia goe to adopt microfinance as a prime component of its. As a federal country, the functions and duties of the government are divided between central and state governments and they are generally. A tax is called proportional when the rate of taxation remain constant as the income of the tax payer raises. The word now means, plans of government finances submitted for the approval of the legislature. The agricultural bank of ethiopia, established in 1945, was targeted primarily to meet the needs of farmers who had suffered damage during the italoethiopia war. The first deals with broad public finance topics such as aggregate fiscal management, efficient allocation of public spending, revenue. Tax directivesministry of finance and economic cooperation of ethiopia.

Lecture 3public finance in ethiopia public finance. The financial performance of the ethiopian banks has been evaluated using the volume of deposit, bank assets. It forms the basis for policy focused analyses and sustained dialogue that facilitate close partnership and enhanced. General government revenue, expenditures and fiscal deficit. This study investigates the financial performance the ethiopian banking sector using tof he panel data set for the period 200405 200910. On the one hand, there are many sources of finance including taxation, external loans and assistance, price policy and domestic borrowing. The central banking function was thus taken over by the national bank of ethiopia. The law of corporate taxation in ethiopia ethiopian legal brief. Chapter two will introduce the students to the income tax in ethiopia. Intermediate level b4 public finance and taxation i study text nbaa foreword the national board of accountants and auditors in tanzania is a professional body in tanzania, established under the auditors and accountancy registration act no 33 of 1972 as amended by act no 2. Taxes and tax reform in ethiopia, 19902003 unuwider. According to lemessa most of the respondents feel that.

This is the tax imposed on the taxable business income net profit realized from entrepreneurial activity. An introduction into public finance and taxation issues for. All legal entities must register for income tax with the ethiopian revenue and customs authority and obtain a tax identification number tin and file annual tax returns by june of the year following the end of the tax year the value added tax vat in ethiopia is levied at a standard rate of 15%. Box 113 addis ababa, ethiopia in collaboration with. Public finance and taxation in ethiopia pdf in a moment of dismissive hubris, the ethiopian tax system may be. Dear abrsh,could you tell me about the evolution and current taxation structure in our country, please i need your help. Ethiopia is a federal country with a twotiers structure of decentralized governance. Tax, public finance, ethiopian taxation, direct tax and indirect tax. Referconsult a tax schedule schedule that shows how much tax is owed for different amounts of income earned by the employee to find. Corporate businesses are required to pay 30% flat rate of business income tax. Access to finance in ethiopia microfinance gateway. The companies are experts in ethiopia taxation, and theyll ensure that you keep the largest proportion of your earnings whilst complying with local laws. 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.

Dont want to miss our interesting news and updates. They can deal with any issues with the ethiopian tax office or tax department directly including processing your tax. 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 the current state of ethiopian financial sector and its. The impact of tax reform on private sector development. You must answer all components of all three parts of the exam. However, whilst the budget process is well ordered and. Fikadu asfaw and associates law office falo on 11 apr 2011 related to taxes and accounting in ethiopia. As we are all know that taxation can be classified into direct and indirect taxes. Pdf ethiopias new financial sector and its regulation. Business income the characterization of an amount as business income is important in both schedular and global income tax systems. Ethiopia is the successful case of a country with similar starting conditions.

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. Constitution of the republic of the union of myanmar. All emails from the system will be sent to this address. An economic analysis of fiscal federalism in ethiopia abu girma moges.