33.
Category of Taxpayers
For the purposes of payment of business tax, taxpayers are categorized into three namely:
Category “A”, Category “B”, and Category “C”.
Category “A” Taxpayer
A. Category “A” taxpayer includes;
Business that have separate legal personality (share company, PLC and public enterprise)
regardless of their annual sales revenue.
Any company incorporated under the laws of Ethiopia or in a foreign country and other
entities having annual turnover of more than Br500, 000.
Those who are categorized under “A” have to maintain all records and account which will
enable them to submit a balance sheet and profit and loss account.
The following details are included the gross profit and the manner in which it is computed ,
general and administrative expenses, depreciation, and provisions and reserves (together with
the supporting vouchers).
B. Category “B” Taxpayer
Category “B” taxpayers includes, unless already classified in Category “A” Taxpayer , business
with no legal personality and those enterprises having annual income of more than Br 100,000
and less than Br 500,000 ( i.e. Br 100,000 < sales < Br 500,000). Category “B” taxpayers have to
submit the profit and loss statement together with the supporting vouchers.
C. Category “C” Taxpayer
Category “C” includes all taxpayers who are not classified under the other two categories and
whose annual turnover is estimated at Br 100,000 or less. Every businessman (except Category
“C”) is required to preserve all books of accounts and other records and documents for a period
of not less than 5 years after the year of income to which such books and documents relate.
To determine the income tax liability of such tax payer , standard assessment or presumptive
method shall be used . Assessment or presumptive tax is fixed amount of tax determined by
estimation or best judgment. However, if categories “C” tax payer maintain books of account,
they shall pay taxes on the basis of their books of account.
34. .
Gross income and deduction applicabl
.Taxable income
Rates applicable or percentage
Taxes paid and due
Any penalty or interest
Taxpayer‟s name, address, and taxpayer identification number (TIN), and
Brief explanation of the assessment and a statement of the taxpayer‟s right
35.
Hotels (other than those star-designated), motels, tea rooms, coffee shops, bars, nightclub and
restaurants that do not have international standards.
Wholesale, retail and import trade
Maintenances services
Commercial road transport and car-hire services
Postal and courier services
Real estate development
36.
REWARD AND ADMINISTRATIVE PENALTIES
Reward for verifiable information:-
1. Where a person provides verifiable and objective information of tax evasion through
concealment, under reporting, fraud or any other improper means, the informer shall be
granted up to twenty percents (20%) of the amount of tax evaded at the time of collection
of the said tax.
2. The informer shall not be entitled to such a reward where:-
a. He/she has participated in the tax evasion or
Penalty for Late Filing or Non-Filing
A taxpayer who fails file a timely tax declaration is liable for a penalty equal to:-
A. 1,000 birr for first thirty (30) days the declaration remains unfilled
B. 2,000 birr for the next thirty (30) days the declaration remains unfilled
37.
A. PENALTY FOR FAILURE TO KEEP PROPER RECORDS
1. The taxpayer shall be liable for a penalty of 20% of the tax assessed if he failed
to keep proper books of account, records, and other documents regarding a certain
tax year.
2. If the tax authority finds that a taxpayer has failed for two consecutive tax years, to
keep proper books of account, records, and other documents.
B. PENALTY FOR FAILURE TO WITHHOLD TAX
1. withholding agent who fails to withhold tax in accordance with this
proclamation personally liable to pay the tax authority the amount of tax which
has not been withheld, but the withholding agent is entitled to recover this amount
from the payee.
2. The tax withholding liability imposed by this proclamation shall be treated as a
tax liability for purposes of any Article providing tax payers with the right to
contest the amount of tax due or to recover tax paid
C.
Obstruction of tax administration
1. A person who,
a. Obstructs or attempts to obstruct an officer of the tax authority in the performance of
duties under this proclamation, or
b. Otherwise impends or attempts to impede the administration of the procutamation,
commits an offence and is liable on conviction to a fine of not less than 100,000 birr, and
imprisonment for a term of two (2) years.
2. The following and similar other actions are considered to constitute obstruction.
a. Refusal to satisfy a request of the tax authority for inspection of documents, reports, or
other information related to a taxpayer‟s income producing activities.
D. A deposit of 50% of the disputed amount should be made to the tax Authority
SILICON VALLEY COLLEGE ACCOUNTS & BUDGET SUPPORT
The appeal is lodged with the Appeal commission within 30 days following the day
of receipt of the assessment notice or from the date of decision of the review
committee.
E.
Confirm, reduce or annul any assessment applied against on the basis of established
factual grounds and the law
Instruct the tax Authority or the taxpayer or any other person or governmental
department
or agency to produce supporting evidence relevant to the taxpayer‟s allegation.
