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~lolralA ., ,;J~T ;lUll}FEDERAL NEGARIT GAZETA

OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

"r1'f-~: ~oP,}- <h1'Cc9f.".Ati1 "11'1 (t~ ?)~ !jjn~

8'" Year No. 33ADDIS ABABA 4~1July 2002

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CONTENTS

Proclamation No. 285/2002

i!n:~f@~ Value Added Tax Proclamation''''''''''

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PROCLAMA nON NO. 285/2002VALUE ADDED TAX PROCLAMA nON

WHEREAS, the cUlTentsales tax does not allow collectionof the tax on the added value created wherever a salestranscation is conducted;

WHEREAS, the value added tax minimizes the aamagethat may be caused by attempts to avoid and evade the tax andhelps to ascertain the profit obtained by the taxpayers;

WHEREAS, the tax enhances saving and investment as itis a consumption tax and does not tax capital;

WHEREAS, r~placement of the cUlTentsales tax by valueadded tax enhances economic growth and improves the ratiorelationship between Gross Domestic Product and Govern-ment Revenue;

NOW, THEREFORE, in accordance with Article 55(1)and(ll) of the Constitution, it is hereby proclaimed asfollows:

SECTION 1General

1. Short Title

This Proclamation may be cited as the "Value AddedTax Proclamation No.285/2002."

2. Definitions

For the purpose of this Proclamation, unless thecontext otherwise requires:1) "accounting period" means a calendnr month.

The month of Nahase and Pagumen shall be ag-gregated and treated as one calendar month;

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Federal Negarit Gazeta - No. 33 4thJuly, 2002- Page 1833

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2) "Agent" means any person who acts on behalf of and on

instructions from another person;3) "Association of persons" means an association of in-

dividuals or an association that includes one or moremembers who are not individuals, but not including anyassociation falling within the definition of "body";

4) "Authority" means the Federal Inland Revenue

Authority;5) "Body" means any company, registered partnership,

entity formed under foreign law resembling a companyor registered partnership, or any public enterprise orpublic financial agency that carries out business activitiesincluding body of persons corporate or unincorporatedwhether created or recognized under a law in force inEthiopia or elsewhere, and any foreign body's businessagent doing business in Ethiopia on behalf of theprincipal. ;

6) "Export" means taking goods out of Ethiopia;7} "Goods" means all kinds of corporeal movable or

immovable property, thermal or electrical energy, heat,gas, refrigeration, air conditioning, and water, but doesnot include mo~ey;

.8) "Money" means:1) a coin or note that is legal tender in Ethiopia; or2) a bill of exchange, bank draft, promissory note,

postal order, or money order; or3) a stamp, form, or card that has a monetary value and

is sold or issued by the Government for thepayment of any fiscal charge levied under any lawexcept where the coin, note, stamp, form, or card isdisposed of as a collector's piece, an investmentarticle, or an item of numismatic interest;

9) "Import of Goods" means bringing goods into Ethiopia

according to the customs legislation;10) "Permanent Establishment" means a fixed place of

taxable activities through which those activities of aperson are wholly or partly carried on. The followingshall, in particular, be considered to be a permanentestablishment, an administrative office, branch, factory,workshop, mine, quarry or any other place for theexploitation of natural resources, and a building site orplace where construction and/or assembly works arecarried out;

II) "Person" means any natural person, sole proprietor,

body, joint venture, or association of persons (includinga business representative residing and doing business inEthiopia on behalf of the principal):

12) "Registering Authority" means a person appointed underany law to issue a license, permi~,certificate, concession,or oth~I'authorization;

13) "Related person" means:(1) a natural person and

(a) any relative of that natural person; or(b) a trust in respect of which such relative is or

may be a beneficiary, or

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2) a trust and a person who is or may be a

beneficiary in respect of that trust; or

3) a partnership, joint venture, or unincorporated

association or body or private company and-

(a) any member thereof, or

(b) any other person where that person and a

member of such partnership, joint venture,

or unincorporated association or body, or

private company as the case"may be, are

related nersons in terms of this definition;

or

4) an incorporated company, pther . than a closed

corporation; 1U1d

(a) a person, other than an incorporated com-

pany, where that person or that person and a

person related to the first mentioned person

in terms of this defmition controls 10

percent or more of-

1) the voting power in the company; or

2) the rights to distributions of capital or

profits of the company, either dir~tly or

through one or more interposed com-

panies, partnerships, or trusts; or

(b) any other incorporated company in which the

first mentioned person referred to in (a) or that

person and a person related to that first

mentioned person in terms of this definition

controls 10 percent or more of-

1) the voting power in the first-mentioned

company; or

2) the rights to distributions of capital or

profits of the first-mentioned company,

either directly or through one or more

interposed companies, partnerships, or

trusts; or

(c) any person where that person and the person

referred to in (a) or the other incorporated

company referred to in (b) are related persons

in terms of this definitiQn; 0r(d) any person related to the person referred to in

(c) in terms of this definition; or

5) a registered person and a branch or division of

that registered person which is separately regis-

tered under Article 16 Sub-Article (5); or

6) any branches or divisions of a registered person

whicQ are separately registered under Article 16

Sub-Article (5);

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14) "relative", in relation to a natural person, means:1) the spouse of the person; or2) an ancestor, lineal descendant, brother, sister,

uncle, aunt, nephew, niece, stepfather, step-mother, stepchild, or adopted child of that personor her spouse, and in the case of an adopted childher adoptive parent; or

3) the spouse of any person referred to in paragraph(2) and for the purposes of this definition, anyadopted child is treated as related to the adoptiveparent within the first degree of consanguinity;

15) "Resident person" shall have the meaning given toit under the Income Tax Proclamation;

16) "Services" means work done for others which doesnot result in the transfer of goods;

17) "Supply" means the sale of goods or the renditionof services, or both;

18) "Supply of Goods" has the meaning assigned to itunder Article 4:

19) "Rendition of Services" has the meaning assignedto it under Article 4:

20) "Tax" or "VAT" shall mean Value Added Tax;21) "Taxable Activity" has the meaning assigned to it

under Article 6;22) 'Taxable Transaction" has the meaning assigned t9

it under Article 7 Sub-Article (3);23) "Tax officer" means

1) the General Manager of the Authority; or2) a person in the service of the Authority or the

Ethiopian Customs Authority; or3) a police officer or official of the Ethiopian

Police Force, acting on behalf of the Authorityunder this Proclamation; or

4) an employee or official of the Ethiopian Postal.Services, acting on behalf of the EthiopianCustoms Authority who administers thisProclamation; and

24) 'Tax invoice" has the meaning assigned to it underArticle 22.

3. Taxpayers1) For the purpose of this Proclamation, the following

persons are taxpayers:(a) a person who is registered or is required to be

registered, referred to as a registered person;(b) a person carrying out taxable import of goods to

Ethiopia, with respect to such import;(c) a non-resident person who performs services

without registration for VAT and who is subjectto taxation under Article 23, with respect tosuch services.

2) A person who is registered is a taxpayer from .thetime the registration takes effect.

3) A person who is not registered, but who is required tobe registered, is a taxpayer from the beginning of theaccounting period following the period in which theobligation to apply for registration arose.

'IX' ?ijr.~;f..!j?; t..Yu/../A '1;1t.} ;l/l.fTI cf:1'C 0r (I); '61 ""} :(~f.j~ <}.yo, Federal Negarit Gazeta - No. 334111July, 2002- Page 1836

~, 4. Supply of Goods and Rendition of Services

1) Subject to this Proclamation:(a) a supply of goods means:

1) a sale of goods; or2) a grant of the use or right to use goods,

whether with or without a driver, pilot,crew, or operator, under a rentalagreement, credit agreement, freight con-tract, agreement for charter, or any otheragreement under which such use or rightto use is granted; or

3) a transfer or provision of thermal orelectrical energy, gas, or water; and

(b) a rendition of services means anything donewhich is not a supply of goods or money,including:

1) the granting, assignment, cessation, orsurrender of any right: or

2) making available a facility or advantage.2) If a registered person purchased goods or services

accompanied by a VAT payment and received (orhas the right to receive) appropriate credit, theapplication of those goods or services to a use otherthan a use in the course or furtherance of a taxableactivity is considered to be a supply of goods orservices by that person in the C0urseof furtherance ofa taxable activity.

3) The supply of goods or rendering of services by anemployer to his employees, including gratuitously, isa supply of goods or services in the course orfurtherance of a taxable activity.

4) If a registered person's VAT registration is canceled,his goods (including capital goods as provided underSub-Article (8) on hand at the time the cancellationtakes effect are considered to be supplied at cost in ataxable transaction taking place at that time if theregistered person claimed or had a right to claim a taxcredit with respect to the acquisition of the goodsunder Article 21.

5) Notwitnstanding the other provisions of this Article,the supply of a good by a person who acquired suchgood in a transaction subject to VAT, but who wasnot entitled to a credit for the VAT on the acquisitionof the good by reason of the operation of Article 21,is not considered a taxable transaction. If a credit waspartially allowed on the acquisition of the good, then,the amount of the taxable transaction is reducedproportionally according to the portion of the creditthat was disallowed.

6) The value of returnable packaging is not included inthe taxable amount, except in the case of sales atretail. Retailers may reduce their taxable transactionsby amounts shown to have been paid by them asrefunds for returned containers.

7) This Proclamation applies to the supply of goods andrendering of services carried out by a nonresident inEthiopia through a permanent establishment inEthiopia or through the internet.

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Federal Negarit Gazeta - No. 334111July, 2002- Page 1837

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8) For purposes of Sub-Article (4), the cost of capital

goods (determined asset-by-asset) treated as sup-plied at the time of de-registration is equal to the

cost of such goods, multiplied by the fraction, the

numerator of which is the number of years of usefullife remaining and the denominator is the total

useful life of the goods. For this purpose, the usefullives shall be determined under directives issued by

the Minister of Revenue.9) The disposal of a taxable activity as a going

concern, or a part of a taxable activity that is

capable of separate operation, is a supply of goods

made in the course or furtherance of such taxableactivity, and the transferee succeeds to the rights

and obligations of the supplier'with respect to theassets transferred.

10) For the purposes of Sub-Article (9), a taxable

activity or a part of a taxable activity capable of

separate operation is disposed of as a going

concern where:(a) all the goods and services necessary for the

continued operation of that taxable activity or

.that part of the taxable, activity are supplied to

the transferee; and(b) the transferor carries on, or is carrying on, that

taxable activity or that part of the taxableactivity up to the time of its transfer to the

transferee.11) Subject to Sub-Article (12), where-

(a) the disposal of a taxable activity, including a

disposition of a part of a taxable activitycapable of separate operation by a registered

person is a supply of goods under Sub-Article(9); and

(b) the supply was charged with tax at the rate of

zero percent in terms of Sub-Article (2)(d) of

Article 7 ; and(c) the goods and services comprising the taxable

activity were acquired by the recipient wholly

or partly for a purpose other than for consump-tion, use, or supply in the course of making

taxable transactions;the acquisition of the taxable activity is a supply by

the recipient in the course or furtherance of a taxableactivity carried on by the recipient to the extent that

the goods and services comprising the taxableactivity were acquired for a purpose other than

consumption, use, or supply in the course of making

taxable supplies,12) Sub-Article (11) does not apply where that part of

the taxable activity referred to in Sub-Article(1l.)(c) is less than 10% of the taxable activity.

13) The Council of Ministers may provide in

regulations for the treatment of other transactions

as supplies of goods or rendition of services, orneither supplies of goods or rendition of services.

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Federal Negari( Gaze(a -- No. 33 -4"'-July.2002,- Page 1838

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5. Mixed Supplies

1) A supply of goods or rendering of services, which is

incidental to a (main) supply of goods or rendering ofservices, is treated as part of the latter.

.

2) The rendering of services incidental to an import of

goods is part of the import of goods.3) A taxable transaction involving independent

elements, one or more of which involves the separates4Pply of goods or rendering of services, whichwould be exempt from tax, is treated as separatetransactions. An exempt transaction, which involvesindependent elements. which involve the separatesupply of taxable goods or rendering of taxableservices, is treated as separate transactions.

6. T.uable Activity

"Taxable activity" means an activity which is carried oncontinuously or regularly by any person:

(I) in Ethiopia, or(2) partly in Ethiopia,

whether or not for a pecuniary profit, that involves oris intended t? involve, in whole or in part, the supplyof goods or services to another person for con-sideration.

SECTION TWOImposition of Tax and Transactions

Exempted tivm the Tax

7. Imposition of Tax

1) Subject to the provisions of this proclamation andsubject to Sub-Article (2), there shall be levied andpaid a tax, to be known as value added tax, at the rateof 15 pen:ent of the value of-(a) every taxable transaction by a registered person;

and(b) every import of goods, other than an exempt

import; and(c) an import of services as provided in Article 23.

2) The following taxable transactions shall be charged

with tax at a rate of zero percent:(.1) the export of goods or services to the extent

provided in regulations;(b) the rendering of transportation or other services

directly connected with international transportof goods or passengers, as well as the supply oflubricants and other consumable technical sup-plies taken on board for consumption duringinternational tlights;

(c) the supply of gold to the National Bank 01

Ethiopia; and(d) ;. supply by a registered person to another

regi ;red person in a si1"}gletransaction ofsubstantially all of the assets of a taxableactivity or an independent functioning part of ataxable activity as a going concern, provided anotice in writing signed by the transferor andtransferee is furnished to the Authority within21 days after the supply takes place and suchnotice includes the details of the supply.

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Federal Negarit Gazeta - No. 33 4thJuly. 2002- Page 1839

'3)'" A t~xable transaction is a sup'ply'of'goods" or arendition of services in Ethiopia in . the course or

. furtherance of Ataxable acti vity other than an exempt, supplyunderArtiCle8. .

4) Bxceptasotherwise provided in this'Proclamation,the tax payable under Sub-Artiale (1) shall-(aJ in the case of a<supply «> which Sub-Article

(I )(a) applies, beaccountecj. for. by the regis-tered person making the supply; or

:,'

(b) dn the c~s((;()fan importof gQodS'towhich Sub-. Article(I) (b)\3pplies,be.paid.bythe importer;or

','

'(c) in the case of ~n import.Df serv;ces to whichSub~Article (1) (c) applies, be; paid by the~~ipient of the. services.

8. Exempt Transactions1) For purposes of this Article:

(a) "commercial rental establishment" means--I) accommodation in any hote'!, motel, inn,

boarding house, hostel, or similar establish-ment in, which lodging is regularly ornormalty provided to five or more per,sonsata daily, weekly, monthly, o~ other periodiccharge;

2) accommodation in .any house,'flat, apart-ment, or T00m,'Otherthan accommodation inrespect of which the provisions of sub-Ar-ticle (l) or (3) of this definition apply, whichis regularly or systematically leased or heldfor lease as residential accommodation forcontinuous periods not exceeding 45 days inthe case of each occupant of such house, flat,apartment, or room, if the total annualreceipts and accruals from the lease thereofexceeded 24,000 Birr; or there arereasonable grounds for believing that suchtotal annual receipts and accruals will ex-ceed that amount;

,3) . accommodation in any house, flat, apart-. ment, . room, caravan, houseboat, tent, or

caravan or camping site which constitutes anasset, including a leased asset of a businessundertaking or a separately identifiable partof a business undertaking carried on by anyperson who:1) leases or holds for leasing as residential

accommodation five or more houses,flats, apartments, rooms, caravans,houseboats, or caravan or camping sitesin the .course of such business under-taking;

2) derives total annual receipts and ac-cruals from th~ leasing of the abovelisted. facilities which exceed 24,000Birr or.there are reasonable grounds forbelieving that such total annual receiptsand accruals will exceed that amount;and

3) regularly or normally leases or holds forlease as residential accommodationsuch houses, flats, apartments, rooms,caravans, houseboats, or caravan orcamping sites for continuous periodsnot exceeding 45 days in the case ofeach occupant; or

1X' ?ijr.~~¥.~ tufu/.'&\ '1:J/.'''' :l/LfJ) ~1'C if)!: /'I); r11 ""} nWi!! ~.9".

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Federal Negarit Gazeta - No. 334111July. 2002- Page 1840

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4) any other accommodation designated by the Minis-ter ofRevenue by directive to be a commercial rentalestablishment,but does not include. those listed under sub-Articles(5) (6) and (7) unless within 4 above: .

5) accommodation in any boarding establishment orhostel operated by any employer solely or mainlyfor the benefit of the employees of such employer orof a related person of such employer or theirdependents, provided such establishment or hostel isnot operated for the purpose of making profits fromsuch establishment of hostel for the employer orsuch related person;

6) accommodation in any boarding establishment orhostel operated by any local authority otherwisethan for the purpose of makingprofits from suchestablishment or hostel;or

7) accommodation in any registered hospital, mater-nity home, or clinic;(b) "dwelling" means any building. premises,

structure, or any other place, or any partthereof, used predominantly as a place ofresidence or abode of any natural person orwhich is intended for use as a place ofresidence or abode of any natural person,together with any appurtenal1ces belongingthereto and enjoyed therewith, but does notinclude a commercial rental establishment;

2) The following types of supplies of goods (other thanby way of export) or rendering of services, as well asthe followirig types of imports of goods, are exemptfrom payment of VAT to the extent provided byregulation:(a) the sale or transfer of a used dwelling, or the

lease of a dwelling;(b) the rendering of financial services;(c) the supply or import of national or foreign

currency (except for that used for numismaticpurposes), and of securities;

(d) the import of gold to be transferred to theNational Bank of Ethiopia;

(e) the rendering by religious organizations ofreligious or church related services;

(f) the import or supply of prescription drugsspecified in directives issued by the Minister ofHealth, and the rendering of medical services;

(g) the rendering of educational services providedby educational institutions, as well as child careservices for children at pre-school institutions;

(h) the supply of goods and rendering of services inthe form of humanitarian aid, as well as importof goods transferred to state ag'encies ofEthiopia and public organizations for the pur-pose of rehabilitation after natural disasters,industrial accidents, and catastrophies;

(i) the supply of electricity, kerosene, and water;(j) goods imported by the government, or-

ganizations, institutions or projects exemptedfrom duties and other import taxes to the extentprovided bylaw or by agreement'.

(k) supplies by the post office authorized under theEthiopian Postal Services Proclamation, otherthan services rendered for a feeor commission;

(1) the provision of transport;(m) permits and license fees;

'IK' P."'[~I;Y.'jp' ~YP"'&\ '1.'1/,.)- .'1lLfll <I!'I'C c!)tO); '61, "") :Wf.:i~ ~.9'" Federal Negarit Gazeta ---, No. 33 41hJuly, 2002- Page 1841

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(n) the import of goods to the extent provided

under Schedule 2 of the Customs TariffsRegulations;

(0) the supply of goods or services by a workshop

employing disabled individuals if more than 60

percent of the employees are disa,bled; and(p) the import or supply of books and other printed

materials to the extent provided in regulations.3) A supply of goods or services is not an exempt

supply under this Article if, in the absence of Sub-

Article (2), the supply would be charged with tax at

the rate of zero percent under Article 7, Sub-Article (2).4) The Minister of Finance and Economic Development

may be directive exempt other goods and services,

SECTION 3

p'lace, Time and Value of Supplies

9, P/iu.:eof Supply of Goods

I) If a supply involves goods being transported, the supply

takes place at the location of the goods when transpor-tation starts. In other cases, the supply of goods takesplace at the location where the goods are transfelTed.

2) A supply of electric or thennal energy, gas, or water

takes place where the goods are received, except that ifthese are exported from Ethiopia, the supply is con-sidered to take place in Ethiopia.

loO. Place of Rendering of Services

I) Except as otherwise provided by this Article, the place of

rendering of services is the location of the taxable activity

of the person who renders the services.

2) The place of rendering of services is:(a) the place where immovable property is located, if

the services are directly connected with theproperty;

(b) the place where the services are actually canied out,

if they are connected with movable property;(c) the place where services are actually canied out, if

they are rendered in the field of culture, art,education, physical fitness, or sports, or in another

similar activity;(d) the place where transportation actually takes place,

if the services are connected with that transportation

for purposes of Article 7, Sub-Article (2)(b), atransaction connected with the rendering ofservicesby a person outsideEthiopia, is consideredas canied out in Ethiopia;

(e) the location of the pennanent establishment of thepurchaserof the services to which the servicesmostclosely relate, in case of:I) the transfer of ownership or concession of

patents, licenses, trademarks, copyrights, orother similar rights;

2) ,consulting, legal, accounting, engineering, and.

advertising service, as well as data processingservices, and other similar services;

'/~' ~i'i.~f.~1 ~1.IrA ~;1tT ;1Uff) -II'I'C~r flk ~i +'} IitU1! '}.go. Federal Negarit Gazeta- No. 33 4thJuly, 2002- Page 1842

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11.

3) the leasing of movable property (except forvehicles of transportation enterprises);

4) services of an agent that engages a person(enterprise or physical person) on behalf ofthe main participant in a contract to performthe services that are described in this SubArticle.

3) In applying Sub-Article (2) of this Article, the placefor rendering of services that are described in morethan one of this Article shall be determined acccrding to the Sub-Article that comes first.

Time of Supply

I) Except as provided in this Article or in regulationsIssued by the Council of Ministers, a supply occurswhen a VAT invoice is issued for that transaction.

2) Notwithstanding the provisions of Sub-Article 1 ofthis Article, if a VAT invoice is not issued within 5days after the moment described in this Sub-Article,the supply will be considered as having taken place--(a) at the time the goods are made available to the

recipient, sold or transferred, or the services arerendered; or

:b) in the case of a delivery of goods that involvesshipment of the goods, when the shipmentstarts.

3) Notwithstanding the provisions of Sub-Article (1)and (2), if payment is made in advance of the timedescribed in Sub-Article (2) (a) or (2) (b), and if ~IVAT invoice is not issued within 5 days after the dateof payment, the supply will be considered as havi.ngtaken place at the time payment is made.

4) For the purpose of Sub-Article (3) of this Article, andexcept as provided in Sub-Article (5) of this Article,if two or more payments are made for a supply, eachpayment is treated as made for a separate supply tothe extent of the payment.

5) If services are rendered on a regular or continui IIgbasis, a rendering of services is treated as t;1!11 i f'place on each occasion when a VAT invoice is issuedin connection with such services or, if payment i"made earlier, at the time when payment is made forany part of such services.

6) In the case of the application of Article 4, Sub-Article (3), the time of the supply is the time whenthe use or consumption of goods or services begins.

7) In the cases specified in Article 4, Sub-Article (4),the time the supply occurs is the time of supply of thegoods or rendering of the services to the employee.

8) In the case of the application of Article 4, Sub-Article (5), the time of supply is immediately beforethe cancellation takes effect.

9) A supply for a consideration in money received bythe supplier by means of a machine, meter, or otherdevice operated by coin, note, or coupon occurswhen the coin, note or coupon is taken from thatmachine, meter, or other device by or on behalf of thesupplier.

10) The time when other supplies occur may beprovided by directives issued by the Minister ofRevenue.

I

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:O~.

12. Value ofa Supply1) The value of a supply is determined according to the

amount the person receives or is entitled to receiveinreturn for the supply of goods or renderingofservices, whether from the customer or any otherperson (including any duty, taxes, or other feepayable), but without including VAT.

2) If the person receives or is entitled to receive goodsor services in exchange for a supply of goods or arendition of services, the value of the supply inlcudesthe market price of these goods or services (in-cluding any duty, taxes, or other feee payable), butwithout including VAT.

3) In a case where the person receives or is entitled toreceive nothing of value in exchange for a supply ofgoods or a rendition of services (including that ofgoods remaining on hand in the case of a cancellationof registration, but not inclucting a supply ofbusinesssamples), the value of the supply is the market priceof the goods or services supplied or rendered(including any quty, taxes, or other fee pay~ble), butwithout including VAT.

4) In the case of consumption or use of goods orservices, other than in connection with a taxableactivity according to Article 4, Sub-Article (3), aswell as in the case of a supply or rendering to anemployer's employee according to Article 4, Sub-Article (4), the value ofthe supply is the cost price ofthe goods or services supplied (including any duty,taxes, or other fee payable), but without includingVAT.

5) The Minister of Revenue may issuse a directive toprovide for the calculation of the value of a supply ofgoods or rendition of services for supplies notcovered in this Article.

13. Adjustment of the Value of a Taxable Transaction1) This Article applies where, in relation to a taxable

transaction made by a registered person:(a) the transaction is cancelled;(b) the nature of the transaction is changed;(c) the previously agreed consideration for the

transaction is altered, whether due to a reduc-tion of prices or for any other reason; or

(d) the goods or services are returned in full or inpart to the registered person.

2) If a registered person has, as a result of theoccurrence of one or more of the events describedin Sub-Article (1) ofthis Article:(a) provide a VAT invoice, and the amount of

VAT shown on the invoice is incorrect, or(b) shown an incorrect amount of VAT on a VAT

return,then an adjustment is made as specified inArticle 20, Sub-Article (2) or Article 21, Sub-

. Article (7).3) Where a tax invoice has been issued in the

circumstances specified under Sub-Article (2)(a)and the amount shown as tax charged in that taxinvoice exceeds the tax properly chargeable inre~pect of the supply, the registered person makingthe supply shall provide the recipient of the supplywith a tax credit note containing the particularsspecified in Sub-Article (9).

4) A person shall not provide a tax credit note in anycircumstances other than those specified underSub-Article (3).

1X' lii($f'i IJ.t-A ).7t-l- .711."14t1'C.,e .'\kn -t"JIilf1i ,.,.. Federal Negarit Gazeta - No. 334111July, 2002- Page 1844

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5) Where a tax invoice has been issued in thecircumstances specified under Sub-Article (2)(a)and the tax properly chargeable in respect of thesupply exceeds the amount shown as tax charged inthat tax invoice, the registered person making thesupply shall provide the recipient of the supply witha tax debit note containing the particulars specifiedin Sub-Article (10).

6) A person shall not provide a tax debit note in anycircumstances other than those specified underSub-Article (5).

7) A registered person shall only issue one tax creditnote or tax debit note for the amount of the excessstated in Sub-Article (3) or (5) respectively.

8) Notwithstanding the provisions of this Article,where a registered person claims to have lost theoriginal tax credit note or tax debit note, theregistered person who made the supply mayprovide a copy clearly marked "copy".

9) Except as the Authority may otherwise allow, a taxcredit note as required by Sub-Article (3) shaIJcontain the following particulars-(a) the words "tax credit note" in a prominent

place;(b) the name, address, and taxpayer identification

number of the registered person making thesupply;

(c) the name, address, and taxpayer identificationnumber of the recipient of the supply;

(d) the date' on which the tax credit note wasissued.

(e) the value of the supply shown on the taxinvoice, the correct amount of the value of thesupply, the difference between those twoamounts, and the tax charged that relates tothat difference;

(t) a brief explanation of the circumstancesgiving rise to the issuing of the tax credit note;and

(g) infonnation suffi~ient to identify the taxablesupply to which the tax credit note relates.

10) Except as the Authority may otherwise allow, atax debit note as required by Sub-Article (5) shallcontain the following particulars:(a) the words "tax debit note" in a prominent

place;(b) the name, address, and taxpayer iden-

tification number of the registered personmaking the supply;

(c) the name, address, and taxpayer iden-tification number of the recipient of thesupply;

(d) the date on which the tax debit note wasissued;

(e) the value of the supply shown on the taxinvoice, the correct amount Of the value ofthe supply, the difference between those twoamounts, and the tax that. relates to thatdifference;

(t) a brief explanatIon of the circumstancesgiving rise to the issuing of the tax debit note;and

(g) infonnation sufficient to identify the taxablesupply to which the tax debit note relates.

.,~. (iir.~~f.U;?; ~1u/..l\ ~:Jt,). ;J/LtIJ <I!'1'C q)!: (t).?)% "") IV.Y.1~'}.9". Federal Negarit Gazeta - No. 33 4111July, 2002- Page 1845

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SECTION 4Time and Value of Imports

14. Time of the Imports of Goods

An import of goods takes place when the goods areentered into the customs declaration.

15. Value of a Taxable Import

1) The value of a taxable import is the customs valueof the goods, detennined in accordance with thecustoms legislation of Ethiopia, plus the sum ofduties and taxes payable upon the import of thegoods into Ethiopia, excluding VAT and incometax withhodlding.

2) In the case of services con.sidered part of an importunder Article 5, Sub-Article (2), their value,without VAT, is added to the value as definedunder Sub-Article (1) of this Article.

SECTION 5Registration

16. Obligatory Registration

1) A person who carries on taxable activity and is notregistered is required to file an application for VATregistration with the Authority if -(a) at the end of any period of 12 calendar

months the person made, during that period,taxable transactions the total value of whichexceeded 500,000 Birr; or

(b) at the beginning of any period of 12 calendarmonths there are reasonable grounds toexpect that the total value of taxable transac-tions to be made by the person during thatperiod will exceed 500,000 Birr.

2) The Minister of Finance and Economic Develop-ment may by directive increase or decrease thethreshold provided for under Sub-Article 1.

3) A person required to. register shall file an ap-plication for registration no later than the last day ofthe month after the end of the period in Sub-Article(I )(a), or the last day of the month of the period inSub-Article (1)(b).

4) Subject to Sub-Article (5), a registered person whoconducts taxable activity in a branch or divisionshall be registered only in the name of the registeredperson.

5) Notwithstanding Sub-Article (4), the Authoritymay, upon application in writing by a registeredperson operating in corporate fonn, authorise theregistered pers<;>nto register one or more of itsbranches or divisions as separate registered personswhere the Authority is satisfied that the branch ordivision maintains an independent accounting sys-tem and can be separately idefitified by the natureof its activities or location.

6).

The regisration of a branch or divisioJ' under Sub-Article (5) is subject to such conditions andrestrictions as the Minister of Revenue may deemfit.

1~' ii1f.~~Y.~} J..1.t.tI. 't;J6.}o;Jt1"1 4r1'Cc9r flk n ":'J Iiifn ,.9". Federal Negarit Gazeta - No. 33 4thJuly, 2002- Page 1846

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.7) In determining whether a person has an obligation to

register under Sub-Article (1):(a) the authority may aggregate the value of taxable

transactions made by one person with the valueof taxable transations made by the other personwhere both persons are related persons; and

(b) the value of the person's taxable transactions isdetermined under Article 12.

17. Voluntary Registration

A person who carried on taxable activity and is notrequired to be registered for VAT, may voluntarily applyto the Authority for such registration, if he regularly issupplying or rendering at least 75% of his goods andservices to registered persons.

18. Registration procedureI) A person applying to register for VAT is required to

do so in such a f.rm as is established by theimplementation directives issued by the Minister ofRevenue.

2) Subject to Sub-Articel (8), when a person carryingout taxable transactions files an application to beregistered for VAT, the Authority is required toregister the person in the VAT register, and to issue acertificate of registrati( n mentioned in Sub-Article 3below within 30 days lIf the registration.

3) The Authority shall issue a VAT registration cer-tificate containing such details as:(a) the full name and other relevant details of the

registered person;(b) the date of issuance of the certificate;(c) the date from which the registration takes effect;

and(d) the registered person's taxpayer identification

number.. 4) F 1"£1.stration takes place on one of the following

dates, depending on which date comes first:(a) in case of obligatory registration, on the first

day of the accounting period following themonth in which the obligation to apply forregistration arose;

(b) in the case of voluntary registration, on the firstday of the accounting penGd following themonth in which the person applied for regis-tration.

(c) on the date selected by the registered person onhis application for registration.

5) The Authority is required to establish and maintain aVAT register containing details of all personsregistered for VAT.

6) If a person is required to register for VAT and has notapplied to be registered, the Authority may registerthe person on its own initiative and send to theregistered person the certificate as mentioned in Sub-Articel (2) of this Article.

7) A person registered for VAT is required to use histaxpayer identification number on all VAT invoices,and on all tax returns and official communicationswith the Authority.

8) When a person applied for voluntary registrationunder Article 17. the Authority can deny the ap-plication for registration if :(a) the person has no fixed place of abode or

business; or(b) the Authority has reasonable grounds to believe

that the person will not keep proper records orwill not submit regular and reiiable tax returns,as required under this Proclamation.

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Federal Negarit Gazeta - No. 33 4thJuly, 2002- Page 1847

19. Cancellation of Registration1) A registered person is to apply to have his regis-

tration for VAT canceled if he has ceased to maketexabIe transactions.

2) Except in situations provided for in Sub-Article (1)of this Article, a registered person may apply to havehis registration for VAT canceled at any time after aperiod of three years of the date of his most recentregistration for VAT if the registered person's totaltaxable transactions in the period of 12 months thenbeginning reasonably are expected to be not morethan 500,000 Birr.

3) The cencellation of VAT registration takes effect atthe time the registered person ceased to make taxabletransactions or, if the registered person has "notceased to do so, at the end of the accounting periodduring which the person app1ies to the Authority forcancellation of VAT registrati0n in accordance withSub-Article (2) of this Article,

4) If a person's registration for VAT is canceled, theAu.thority is required to remove the person's nameand all other details from the VAT register and theperson is required to return the issued certificate ofregistration.

SECTION 6Calculation of Tax Payable

20. Tax Payable for Tax Period

1) The amount of tax payable for any accounting periodby a person who is registered or is required to registeris the difference between the amount of tax chargedon taxable transactions in accordance with Article 7and the amount of tax creditable under Article 21.

2) In cases described in Article 13, where VAT payableexceeds VAT actually indicated by the registeredperson, the amount of the excess is treated as VATdue for the accounting period in which the eventreferred to in Article 16 occurred and is added to theamount of tax payable for the accountir.g periodunder Sub-Article (1) of this Article.

21. Tax Credit

I) Except as otherwise provided in this Article, theamount of VAT that is creditable is the amount ofVAT payable (paid) by a registered person in respectof tax invoices or Customs Declarations issued to theperson for:(a) imports of of goods that take place during the

current accounting period under Article 14; and(b) taxable transactions involving the supply of

goods or rendering of services that are con-sidered to take place during the current orpreceding accounting period under Article 11,

where the goods or services are used or are to be usedfor the purpose of the registered person's taxabletranscations.

2) Where only a part of the supplies made by aregistered person during a tax period are taxabletransactions, the amount of tax creditable under Sub-Article (1) for that period is determined as follows:

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Federal Negarit Gazeta - No. 33 4thJuly. 2002- Page 1848

(a) in respect of a supply or import received. whichis directly.allocable to the making oftaxable transactions, the full amount of taxpayable in respect of the supply or importshall be allowed as a credit;

(b) in respect of a supply or import receivedwhich is directly allocable to the making ofexempt transaction. no amount of taxpayable in respect of the supply or import.shall be allowed as a credit, or shall beallowed as a credit; or

(c) in respect of a supply or import receivedwhich is used both for the making of taxableand exempt transactions, the niles of appor-tionment of the credit shall be determined bya directive to be issued by the Minister orRevenue,

3) No credit is allowed for VAT:(a) on a taxable transaction to, or import by, a

person of a passenger vehicle:I) unless the person is in the business of

dealing in, or hiring of, such vehicles, andthe vehicle was acquired for the purposes ofsuch business, or

2) unless theperson is engaged in the businessof transporting passengers for hire and thevehicle was acquired and is licensed for thatpurpose;

(b) on a taxable transaction to, or import by. aperson of goods or services acquired for thepurposes of entertainment or providing enter-tainment, unless-

I) the person is in the business of providingentertainment andthe supply or importrelates to the provision of taxable transac-tions involvingentertainmentin the or-dinary course of that business; or

2) the person is in the business of providingtaxable transactions involving transpor-tation services and the entertainment isprovided to passengers as part of the trans-portation services; or

4) For purposesof Sub-Article (3):(a) "passenger vehicle" means a road vehicle

designed or adapted fonhe transport of eight orfewer seated persons, including a double cabvehicle, and

(b) "entertainment" means the provision of food,beverages, tobacco, accommodation,amusement, recreation, or hospitality of anykind by a registered person whether directly orindirectly to any person in connection with ataxable activity carried on bythe registeredperson.

S) In cases provided for in Article 13, where VATincidated in the VAT invoice or Customs De-claration for a transaction exceeds VAT payable ODthis transaction, the registered person is allowed acredit for the amount of the excess in the accountingperiod in which the event referred to in Article 13occurred, except that if the supply was made to aperson who is not a registered person, no credit isallowed unless the excess tax has be,en repaid to therecipIent of the supply

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22.

6) A person who registers for VAT after the introduc-

tion of VAT shall be entitled to credit under thisArticle in the first accounting period in which theperson is registered for VAT paid or payable ongoods (including capital goods) that are on hand onthe date of registeration, but only to the extent thatthe purchase or import of the goods occurred notmore than six months prior to the date of regis-tration.

7) A beneficiary of the Duty Draw-Back Scheme

under Proclamation No.249/2001: A Proclamationto Establish Export Trade Duty Incentive Scheme,is not entitled to a refund of VAT paid on impQrtsunder that scheme to the extent that the beneficiaryclaims a credit under this Article for tax on imports.

Tax Invoices

I) Except as otherwise provided in Sub-Articles (6)and (7) of this Article, a person registered forVAT that carries out a taxable transaction isrequired to issue a VAT invoice to the person whoreceives the goods or services. A person who isnot registered for VAT does not have the right toissue a tax invoice.

2) A VAT invoice is a document execuled in theform stipulated by the Minister of Revenue andcontaining the following information:

(a) full name of the registered person and thepurchaser, and the registered person's tradename, if different from the legal name,

(h) taxpayer identification number of the regis-tered person and the purchaser,

(c) number and date of the VAT registrationcertificate;

(0) name of the goods shipped or services ren-dered;

(e) amount of the taxable transaction;(t) amount of the exise on excisable goods;(g) sum of the vat due on the given taxable

transaction;(h) the issue det if the VAT invoice, and(i) serial number of the VAT invoice.

3) The registered person is required to issue the VATinvoice to the purchaser of goods or services uponthe supply or rendering, but not later than 5 daysafter the transaction,

4) Except when a tax invoice is not required underSub-Articles (6) and (7), a registered recipientwho has not received a tax invoice as requiredunder Sub-Article (1) may request, in writingwithin 60 days after the date of the supply, theregistered supplier to provide a tax invoice inrespect of the taxable transaction, and the suppliermust comply within 14 days after receiving therequest.

'5) Where a registered recipient claims to have lostthe original tax invoice for a taxable transaction,the registered supplier may provide a copy clearlymarked "copy".

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6) Subject to Sub-Article (7). in the case of a

registered person's supply of goods or rendering of

services at retail to purchasers who are not VAT

registered persons, the Minister of Revenue may by

directive provide that a receipt or simplified fonn ofVAT invoice may be used instead of a VAT

inVOIce.

7) The Minister of Revenue may by directive waive a

registered person' s obligation to issue a receipt or

tax invoice for cash sales if the total consideration

for the entire supply does not exceed 10 birr.

l3. Revene Taxation

1) If a nonresident person who is not registered for

VAT in Ethiopia renders services in Ethiopia for a

customer described in Sub-Article (2) of this

Article. the rendering of services is taxed accor-

ding to this Article.2) For purposes of this Artick. a customer is any

person registered in Ethiopia for VAT or any

resident legal person.3) Except as provided in Sub-Article (7),. in a case

where Sub-Article (1) of this Article applies.

unless the service is exempt from tax under

Article 8 jf it is provided to an Ethiopian supplier,

the customer shall withhold the tax from the

amount payable to the non-resident. The amount

of tax is determined by a method of calculation to

be detennined by Regulations issued by the

Council of Ministers.4) If the cutomer is registered for VAT, the withheld

tax is payable at the time for filing of the VAT

return for the accounting period in which the

transaction took place. The payment document

for payment of the withheld tax is considered to be

a VAT invoice, and gives the customer the right to

a VAT credit according to Article 21 Sub-Article(1).

5) If the customer is not registered for VAT. he is

required to pay the witheld tax in the manner

prescribed by the implementation directives is-

sued by the Minister of Revenue within 30days of

the date of payment to the non-resident.6) In the case of the import of property owned by a

nonresident for lease, where the lease payments

are subject to VAT under this Article. the lessee

may claim a VAT credit for the tax paid on the

import upon the agreement of the nonresident

owner. In this event, the lessee is treated as the

taxpayer and is responsible fot VAT paybale upon

the subsequent supply of the property.7) This Article does not apply to an import of

services to the extent that the nonresident supplier

of the services pays thp tax imposed on the import

services under Sub-Article (3).

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Federal Negarit Gazeta - No. 334'1' July, 2002- Page 1851

24. Transaction by Agent.

1) A supply of goods or rendering of services by aperson as agent ("proxy") for another p~rson ("prin-cipal") on behalf and on. instruction of that otherperson is considered as a transaction made by theprincipal. Both Agent principlal shall be held liableto pay the tax according to the provisions of thisProclamation.

2) Sub-Article (1) of this Article does not apply toservices rendered by an agent to the principal.

3) Sub-Article ( 1) of this Articledoes not apply to thesupply of goods in Ethiopia ~y a resident agent of anon-resident person who is not registered for VATin Ethiopia. In this case for purposes of VAT thesupply is considered as carried out by the agent.

25. Specii.llRules

When the rules in the Proclamation are difficult to apply,to calculate the tax liability of suppliers of gambling,lottery, and travel agent services, sales on commission,sales of second-hands, and supplies of other industries,Ihe Minister of Revenue may issue directives governingthese suppliers or supplies.

Section 7Administrative procedures

26. Filling of Tax Return and payment of VAT.I) Every registered person is required: .

(a) to file a VAT return with the Authority for eachaccounting period, whether or not tax is payablein respect of that period;

(b) to pay the tax for every accounting period by thedeadline for filing the VAT return.

2) The VAT return for every accounting period shall befiled no later than the last day of the calendar monthfollowing the accounting period.

3) In cases where a registration takes place withretoractive effect under Article 18, Sub-Article(4)(c), the registered person is required to pay VATfor taxable transactions taking place since thecoming into effectt of the registration and is entitledto a VAT credit according to credit procedures forregistered persons. In addition, the correspondingtransactions are tobe retlected on the first return filedbythe registered person and are considered as takingplace during the month to which the return relates. Inthis event the registered person is entitled to issueVAT invoices for the .transactions shown on thereturn.

4) VAT on taxable imports is collected by the EthiopianCustoms Authority in accordance with thisProclamation and the customs legislation of Ethiopiaunder the procedure contemplated for customs duty.

27. VATRefund1) Subject to this Article, if at least 25 percent of the

value of a registered person's taxable transactions forthe accounting period (other than under Article 7Sub-article (2)(d) is taxed at a zerO rate, theAuthority shall refund the amount of VAT applied asa credit in excess of the amount of VATcharged forthe accounting period within a period of twomonthsafter the registered person files an application forrefund, accompanied by documentary proof ofpayment of the excess amounts.

"~' fii1'.~~~:B{J..1ut.lI. ~;J~'1' .~'LIfJ ~'1'C ~jr I'Ik ?t1"") Iii~~~'}.1J". Federal Negarit Gazeta - No. 33 4LhJuly. 2002- Page 1852

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2) Subject to this Article, in the case Qfotherregistered persons. the amount of VAT applied as acredit in excess of the amount of VAT charged forthe accounting period is to be carried forward to thenext five accounting periods <!nd creditedagainst payments for these periods. and any unusedexcess remaining after the end of this five-monthperiod shall be refunded by the Authority within aperiod of two months after the registered personfiles an application for refund. accompanied bydocumentary proof of payment of the excessamounts.

3) In all cases where an amount refunded to a person isestablished by the Authority to have been madeerroneously, the Authority may demand the returnof such amount.

4) The Minister of Finance and Economic Develop-ment shall determine the manner in which and theamount of the tax collections that will he retainedfor VAT refunds.

5) Where the Authority is satisfied that a person whomade an application for refund under Suh-Article(l) or (2) has overpaid tax, the Authority shall:(a) first apply the amount of the excess in reduc-

tion of any tax, levy, ;nterest, or penaltypayahle hy the person under thisProclamation. the Cutoms Proclamation, theIncome Tax Proclamation, or the Sales andExcise Tax Proclamation; and

(b) then repay any amount remaining to theperson if the amount to he refunded is morethan 50 hirr.

6) If a registered person is entitled to a refund underSub-Article (5) and the Authority is satisfied thatthe person has overpaid tax, then if the Authoritydoes not pay the refund hy the date specified inSub-Article (1) or (2), whichever is applicable, theAuthority shall pay the person entitled to therefud, interest set at 25% (twenty five percent)over and above the' highest commercial lendinginterest rate that prevailed during the precedingquarter.

28. Responsibility for Administration and Reporting1) The responsibility fur the correct calculation and

timely payment of VAT and presentation or' areturn to the Authority hy the prescribed dealinerests on the tuxapayer or other person in accord:mcewith this Proclamation, and in cases where thecollection of VAT is In the competence of theEthiopian Customs Authurity, in accordance \\liththe customs legislation of Ethiopia.

2) The tax is administered hy the Authority <lnuby theCustoms Authority within their respective com-petencies, in accordance with this Proclamationand with the custom) legislation of Ethiopia.

29. Assessment of Tax1) If, ,after review by the Authority, it appears that a

person has understated his tax obligation. theAuthority shall issue an additional assessment:-

(a) except as provided in (b), within 5 years afterthe end of the acco~nting period concerned;

(b) in the case of fraud or gross or willfulnegligence, notwithstanding any limitation inany other law, at any time.

',~. ;ijr,~I;r.:ft ~Yu(,'&\ ~:J(.'}' ;JILn, ~'1'C c!;!: r'1~?)~.,.', nin~ "9",

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Federal Negarit Gazeta - No. 33 4111July, 2002- Page 1853

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t!;;i'

2) If the Authority makes an additional assessment

under sub-Article (1) and within 30 days of the

notice and demand, the person assesseddoes not pay

the additional assessment or appeal the assessment

as provided under article 43. the person is in default.

Section 8ColJection Enforcement

30. Powers And Duties of Tax Administration

1) The implementation and enforcement of this

Proclamation and of Regulations issued"hereundershall be the duty of the Authority.

2) Notwithstanding anything to the conttary in any

other law, the. Authority shall be empowered toinvestigate any statements, records and books ofaccount submitted by any person at any time by:(a) sending duly accredited inspectors to check the

statements, records and books of account, or

any vouchers, stocks or other material items at

the person's place of business or practice;(b) requiring the person or any employee who has

access to or custody of any information,

records or books of account to produce the

same and to attend during normal office hoursat any reasonable convenient tax office andanswer any questions relating thereto;

(C) requiring any person including a municipality,

body, financial institution, department oragency of Federal or Regional Government to

disclose particulars of any information or tran-sactions;

31. Seizure of Property to ColJect Tax

1) Subject to Sub-Article (4), if any person liable to pay

any tax imposed by this Proclamation is in default

Article 29, Sub-Article (2) or Article 43. Sub-Article(2), it shall be lawful for the Authority to collect such

tax (and such further amount as shall be sufficient to

cover the expenses of the seizure) by seizing any

property belonging to such person.2) For purposes of this Section, the term "seizure"

includes seizure by any means, as well as collection

from a person who owes money or property to the

person liable for V AT. Except as provided in Sub-

Articles (3) and (6), a seizure shall extend only toproperty possessed and obligations existing at the

time the seizure is made. The Authority may reque5t

a police officer to be present during the seizure.

Where the Autllority seizes any p.roperty as provided

hereinabove. it shall have the right to sell the seized

goods at public auction or in any other manner

approved by the Authority not less than 10 days after

the seizure. except that when the goods seized areperishable, the Authority can sell the goods after any

reasonable period having regard to the nature of the

goods.

1K' {i~'.~~f.:;~ ~1..t.~ ~:Jt ;Jfl.1fJ""'C t!Jr (\1 ~~ .,., Iifj~ ,.9"'. Federal Negarit Gazeta - No. 33 4thJuly, 2002~ Page 1854

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3) Whenever any property on which seizure had beenmade is not sufficient to satisfy the claim for whichseizure is made, the Authority may, thereafter andas may be necessary, proceed to seize otherproperty liable to seizure of the person againstwhom the claim exists until the amount due fromsuch person, together with all expenses, is fullypaid.

4) Seizure may be made under Sub-Article (1) onproperty of any person in default with respect toany unpaid tax only after the Authority has notifiedsuch person in writing of the intention to makesuch seizure. The notice shall be delivered not lessthan thirty (30) days hefore the day of the seizure.

5) If the Authority makes a finding that the collectionof the tax is in jeopardy, demand for immediatepayment of such tax may be made hy the Authorityand, on failure or refusal to pay the tax, collectionthereof hy seizure shall he lawful without regard tothe 30-day period provided in Sub-Article (1) andthe 30-day provided in Sub-Article (4).

6) If a seizure has been made or is ahout to be made onany property, any person having custody or controlof any books or records containing evidence orstatements relating to the property subject toseizure shall, on demand of the Authority, exhihitsuch books or records to the Authority.

7) Any person in possession of (or obligated withrespect to) property subject to seizure on which aseizure has heen made shall, on the demand of theAuthority, surrender such property (or dischargesuch ohligation) to the Authority, except such partof the property as is, at the time of such demand,suhject to a prior secured claim of creditors andsuhject to an attachment or execution under anyjudicial process.

8) Any person who fails or refuses to surrender anyproperty subject to seizure, on demand of theAuthority, shall be personall y liable to the govern-ment in a sum equal to the value of the property notso surrendered, hut not exceeding the amount oftax for the collection of which seizure has beenmade (together with costs and interest on suchsum).

9) In addition to the personal liahility imposed hySub-Article (8), ifthe failure or refusal to surrenderis without reasonable cause, such person shall heliable for an additional charge equal to fifty percent(50%) of the amount recoverable under Suh-Ar-ticle (8).

10) Any person in possession of property who surren-ders or makes payment in accordance with thisArticle shall be discharged from any obligation orliability to the delinquent person or to any otherperson arising from such surrender or payment.

32. Preferential Claim to Assets1) From the date on which tax becomes due and

payable under this Proclamation,- subject to the. prior secured claims of creditors, the Authority hasa preferential Claim upon the asSets of the personliable to pay the tax untitthetax is paid.

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Federal Negarit Gazeta - No. 33 41hJuly, 2002- Page 1855

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2) Where a person is in default of paying tax, the

Authority may, by notice in writing, inform thatperson of the Authority's intention to apply to theRegistering Authority to register a security interestin any asset, which is owned, by that person, tocover any unpaid tax in default, together with anyexpense incurred in recovery proceedings.

3) If the person on whom a notice has been servedunder Sub-Article (2) fails to pay the amountspecified in the notice the Authority may, by noticein writing, direct the Registering Authority that theasset, to extent of the notice, the Authority may, bynotice in writing, direct the Registering Authoritythat the asset, to the extent of the defaulter's interesttherein, shall be the subject of security for the totalamount of unpaid tax.

4) Where the Authority has served a noticf' ')n theRegistering Authority shall, without fee, registerthe notice of security as if the notice were aninstrument of mortgage over or charge on, as thecase may be, such asset, and such registI.ttion shall,subject to any prior mortgage or charge, operatewhile it subsists in all respects as a legal mortgageover or charge on the asset to secure the amountdue.

33. Collection of Tax from Recipients of Supply

1) Where, in consequenceof a fraudulent action or

misrepresentation by the recipient of a taxabletransaction from a registered person, the registeredperson incorrectly treated the transaction as anexempt or zero-rated transaction, the Authoritymay raise an assessment upon the recipient for theamount of unpaid, tax in respect of the transaction,together with any interest or penalty that hasbecome payable.

2) The Authority shall serve notice of tax charged

under Sub-Article (1) on the recipient specifying:(a) the tax payable;(b) the date the tax is due and payable; and(c) the time, place, and manner of objecting to

the assessment.3) An assessment raised under Sub-Article (1) is

treated as any tax charged for all purposes of theProclamation.

4) Sub-Article (1) does not preclude the Authority

from recovering the tax, interest, or penalty fromthe registered person making the supply.

5) For purposes of Sub-Article (4), any amount

recovered from the recipient is to be creditedagainst the liability of the registered person; andany amount recovered from the registered person isto be credited against the liability of the recipient.

6) Where an amount of tax, interest, or penalty

referred to in Sub-Article (1) is paid by theregistered person, the registered person mayrecover the amount paid from the recipient.

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(.)

34. Jeopardy Assessment

In exceptional cases where the Authority has reasonablegrounds to believe that the collection of tax is injeopardy, and where a state of urgency exists, theAuthority may issue an administrative order to a bankwith a statement of justification supplementing its orderto block the accounts of the person liable for tax andsecure information thereon, and may make an im-mediate assessment of tax for the current and any prioraccounting period; provided, however, that theAuthority shall obtain court authorization within ten(10) days from the date of issuance of its administrativeorder and further that such powers may only be used toelucidate information relevant to the assessment.

Taxpayer Safeguards

Any property seized under Section 8 shall be seized.held, and accounted for only by the Authority. No otheragency of the government may require the propertyseized under this Section to be transferred or given overto it for any cause what so ever. If any rroperty seizedunder this Section is sold, any portion of the proceeds inexcess of the person's liabilities shall be returnedpromptly to the owner of the property.

36. Duties of Receivers

35.

1) In this Article, "receiver" means a person who,with respect to an asset in Ethiopia of a registeredperson, IS:

(a) a liqidator of a company;(b) a receiver appointed out of court or by a court;(c) a trustee for unrehabilitated insolvent;(d) a mortgagee in possession;(e) an executor of a deceased estate; or(f) any other person conducting a business on

hehalf of a person legally incapacitated.2) A receiver shall, in writing, notify the Authority

within 14days after being appointed to the positionor taking possession of an asset in Ethiopia,whichever first occurs.

3) The Authority may, in writing, notify a receiver. ofthe amount which appears to the Authority to hesufficient to provide for tax which is or will becomeayable by person whose assests are in the posses-sion of the receiver.

4) A receiver-(a) shall aside, out of the procceeds of sale of an

asset, the amount specified by the Authorityunder Sub-Article (3), or such lesser amount asis subsequently agreed on by the Authority;

(b) is liable to the extent of the amount set asidefor the tax of the person who owned the asset;and

(c) may pay any debt that has priority over the taxreferred to in this Article notwithstanding anyprovision of this Article.

5) A receiver is personally liable to the extent of anyamount required to be set aside under Sub-Article(4) for the tax referred to in Sub-Article (3) if, andto the extent that, the receiver fails to comply withthe requirements of this Article.

'!}\" ?!i1:~~r~% J...Yut.t\ ~;J~'''' ;JtLlTJ <h1'C <!.if ()~?)1 4'') Hin~ ~.9'" Federal Negarit Gazeta - No. 33 4thJuly, 2002- Page 1857

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Section 9Records

37. Record keeping

I) A registered person or any other person liable for tax

under this Proclamation shall maintain for 10 yearsin Ethiopia-(a) original tax invoices received by the person,(b) a copy of all tax invoices issued by the person,(c) customs decumentation relating to imports and

exports by the person,(d) accounting records; and(e) any other records as may be prescnbed by the

Minister of Revenue by directive.2) For purposes .of Sub-Article (1), records means

accounting records, accounts, books, computer-stored information, or any other documents.

38. Notification of Changes

Every registered person shaH notify the Authority, inwriting, of:I) any change in the name, address, place of business,

constitution, or nature of the principal taxableactivity or activity or activities of the person; and

2) any change of address from which, or name in which,

a taxable activity is carried on by the registeredperson,within 21 days of the change occurring.

39. Service of Notice

I) A notice or other document issued, served, or givenby the Authority under this Proclamation, shall becommunicated in writing as follows:(a) In the case of a resident individual, by registered

letter or by delivery to the taxpayer in person, orif he is absent to any adult member of his familyor any person employed by him at his residenceor place of business or professional practice,provided that if no person. can be found toaccept such service then the same may beeffected by affixing the notice to the door orother available part of the said residence orplace of business;

(b) In the case of a resident body, by registered

letter to the registered address of the body or bydelivery to any director or employee of the bodyat any of its places of business; and

(c) In the case of non-resident persons, or thier

agent or agents in Ethiopia or by affixing to thedoor or other available part of the redidence orplace of business of such agent if he could notbe served in person.

2) If in any case none of the measures specified in Sub-Article (1) are effective, service may be dischargedby the pubIcication in any newspaper in which courtnotices may be advertised, with the cost of suchpublication to be charged to the taxpayer.

fAIt"::}. AfI1t. \\0'/.'1; : 40. Review Committee

f Mt,,::}, A flJt. \'D'/.'I; AI}1\,} f1:}')10 111\1'"A flJ). ~I\", Members of the Review Committee shall be appointed byA~'/..Il',.} 11"I1.sP',1"O'/.t{t'h: f,{tfO'/ft. ::

the Minister of Revenue upon the recommendation of the

\,o?,'I;(I)' {tftO'/.c;,{.(I)<I"'AflJ1c.' "''"I'}C Head of the Authority.

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Federal Negarit Gazeta- No. 33 4thJuly. 2002- Page 1858

Section 10Appeal procedure

1) The Revi~w Commiuee shall be accountable to the

head of the Authority and shall have the followingduties:(a) to examine :md decide on all applications

submitted by tax payers for compromise ofpenalty and interest and on the tax assessed;

(b) to gather any written evidence or information

relevant to the matter submitted;(c) to summon any person who directly or indirec-

tly has dealt with the assessmen~. to appear

before it for questioning him about the caseunder its investigation; and

. (d) to review determinations made by the Authority

for accuracy, completeness, and compliancewith this Proclamation.

:2) The llead of the Tax Authority may approve therecommendations or remand the case, with his

observations. to the Committee for further review.3) The Committee shall only review application sub-

mitted to it within 10 days of receipt of taxassessment notification.

42. Waiver oFPen;J!(vThe Review Committee may waive administrative penal-ties in accordance with the directives issued by theMinister of Revenue.

.+3. Appe;J!

I) Any person who objects to an additional assessment

made by the Authonty has the right to appeal. within

30 days from the receipt of that assessmentnotification. or from the date of decisl<JIl of theReview Committee to the Tax Appeal COml11lSSlOnby depositing in cash with the Authority an amount

e4ual to 50% of the additional tax a?sessed.2) If a person appeals in accordance with Sub-Article

(I) and the Tax Appeal Commission determines that

the person is liable for the additional assesement, heshall be in default unless he pays within thirty (0)

days of the decision of the Commission.3) If no appeal is made within the period prescribed In

Sub-Article ( I) of this Article, the Additional assess-

ment of the tax made by the Authority shall hedeemed to be correct and final and shall he !Inmediately payat)ie.

4) Without prejudice to Sub-Article (l) of this Article,

the provisions of the income Tax Proclamation.concerning appeals shall.mutatis mutandis. apply to

appeals regarding taxes' imposed by thisProclamation.

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~~.

Federal Negarit Gazeta - No. 334111July, 2002- Page 1859

44. Burden of Proof

The burden of proving that an assessment is excessive or

that the decision of the Authority is wrong is on the

person objecting to the assessment or desision.

Section 11

Administrative Penalties

45. Penalties

f.,.tlltl~""') The following penalties are imposed for violations of this

Proclamation:

a) Where any person engages in taxable transactions

without VAT registration where VAT registration isrequired - 100 percent of the amount of tax payablefor the' entire period of operation without VATregistration;

(b) Where any person issued incolTect tax invoice

resulting in a decrease in the amount of tax orincrease in aClTeditor in the event of the event of thefailure to issue a tax invoce - 100 percent of theamouant of tax for the invoice or on the transaction;

(c) Where a person who is not registered for VAT

issues a tax invoce - a penalty of 100 percent of the

tax which is indicated in the tax invoice and is due

for transfer to the budget but has oat been trans.felTed; and

(d) Where a person fails to maintain records required

under Article 37- 2,000 BilT for each month 01portion thereof that the failure continues.

Uf~~'., .f

~:,.

'1'

46. Penalties for Late Filing

1) Execpt as otherwise provided in this Proclamation, aperson who fails to file a timely return is liable forapenalty equal to 5 percent of the amount of taxunderpayment for each month (or portion thereot)during which the failure continues, up to 25 percent ofsuch amount.

2) The penalty under Sub-Article (1) of this Article is

limited to 50,000 Birr for the furst month (or portionthereot) in which no teturn is filed.

3) For purposes of this Article, an underpayment of tax

is the difference between the tax required to beshown on the return and the amount of tax paid bythe due date.

4) In any event the penalty may not be less than smaller

of the two amounts:

(a) 10,000 BilT;(b) 100 percent of the amount of tax required to be

shown on the return.

1) If any amount of tax is not paid by the due date, the

person liable is obliged to pay interest on suchamount for, the period from the due date to the datethe tax is paid

2) The interest rate under Sub Article (1) of this Article

is set at 25% (twenty five percent) over and above thehighest commercial lending interest rate thatprevailed during the preceding quarter.

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~i.

Federal Negarit Gazeta - No. 334111July, 2002:- Page 1860

,"" ;';:'"'.:..,:;.~. ; ,

Section 12'.'. '-'IioJ;:

Criminal Offencesf,'"

'" "";!'t'

.'

48. kfrocedur:c in TaxQfJ~ce Cases"

-~,

~ \

A tax offeR~e. und.cp;,this Section 12 is a vio,lation of the.".. 1

;,

criminal I,\w, of Eth;opia aDQ,s~allo be charged,pro$ecuted, and appealed iQ accor<Jance with Ethiopia

~riminal proceQln'e laW.

49. Tax EvasionA person who evades the declaration or payment of tax,or a person who, with the intention to defraud thegovernment; applies fC?ra refund he is not entitled to,commits an offence and, in addition to any penalty underSection n, may be prosecuted and, on conviction, besubject to i1term Ofimprisonment of not less than five (5)years.

50. Making False or Misleading StatementsI) A taxpayer who:

(a) makes a statement to a tax officer of the

Authority that is false 'or misleading in aIDluerial particular, or

(b) omits from.a statement made to an officer of the

Authority any matter or thing without which thestatement is misleading in a material particular,commits an offence and is liable on conviction.

2) Where the statement or omission is made without.

reasonable excuse,(a) and if the inaccuracy of the statement were

undetected may result in an underpayment oftax by an amount not exceeding 1,000 BiIT, to a'fine of not less than 10,000 Birr and not morethan 20,000 Birr, and imprisonment for a termof not less than one (1) year and not more thanthree (3) years, and

(b) if the underpayment of, tax is in an amount

exeeding 1,000 Birr, to' a fine of not less than2Q,OOOBirr and not more than 100,000 Birr and

. imprisonment for a term of not less than three(3) years and not more than five (5) years,

3) Where the statement or omission is made knowingly or

recklessly:

(a) and if the inaccuracy of the statement were

undetected may result in an underpayment oftax by an amount not exceeding 1.000 Birr, to afine of not less than 50,000 Birr and not morethan 100,000 Birr, or imprisonment for a termof not less than five (5) years and not more thanten (10) years; and

(b) if the underpayment of tax is in an amount

exceeding 1,000 Birr, to a fine of not less than75,000 Birr and not more than 200,000 Birr, orimprisonment for a term of not less than ten (10)years and not more than fIfleen ( is) years,

5], Obstruction of Administration]) A preson who,

(a) obstructs or attempts to obstruct an officer of the

Authority in the performance of duties underthis Proclamation, or

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FederalNegantGazeta- No. 33~ May; 2002- Page 1861

(b) otherwise impedes or attempts to impede theadministration,oftheProclamation, .

corhinits an offence and is liable on CQnvicponto a fine of not less than 1,000 Birr and not morethan 100,000 Birr, and imprisonment for a termof two (2) years;

2) For purposes of Sub-Article (1), the following andsimilar other actions are considered to constituteobstruction: .(a) refusal to satisfy a request of the Authority for

inspection of dpcuments\ reports, or other infor-mation related to a tax~pyer's income-produc-.ting activities; ,

.

(b) noncompliance with an Authority"request toreport for an interv,iew;

(c) interference with a taxation officer's right toenter the taxpayer's business premises.

52. Failure to NotifyAperson who fails to notify the Authority of a change asrequired by Article 38 commits an offence and is liableon conviction:(a) where the failure was made knowingly or reckles-

sly, to a fine of not less than 10,000 Birr and toimprisonment for one year; or

(b) in any other case, to a fine of not less than 5,000 Birr

and to imprisonment for six months.

53. Offenses by Tax Officer1) Any tax officer or former taxation officer employed

in carrying out the provisions of this Proclamationwho, .

(a) directly or indirectly asks for, or receives inconnection with any of the taxation officer'sduties, a payment or reward, whether pecuniaryor otherwise, or promise or security for thatpayment or reward, not being a payment orreward which the officer is lawfully entitled to

.

receive, or(b) enters into or acquiesces in an agreement to do

or to abstain from doing, permit, conceal, orconnive at any act or thing whereby the taxrevenue is or may be defrauded or which iscontrary to the provisions of this Proclamationor to the proper execution of the taxationofficer's duty,commits an offence and is liable on convictionto a fine not less than 50,000 Birr and toimprisonmentfor a term of not less than ten (10)years and not more than twenty (20) years.

2) A tax officer or former tax officer employed incarrying out the provisions of this Proclamation,except such information is.required by the Commer-cial Code of Ethiopia to be published in the TradeGazette, who,(a) discloses to any person or that person's res-

presentative, any matter in respect of anotherperson, that may, in the exercise of the taxationofficer's powers of the performance of thetaxation officer's duties under the saidprovisons, coine to the taxation officer'sknowledge; or

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~~.

Federal Negarit Gazeta - No. 334111July, 2002- Page 1862

(b) permits any other pe)"son to have access torecords in the possession or custody of theAuthority, except in the exercise of the taxationofficer's powers or the performance of theofficer's duties under this Proclamation or byorder of a court;commits an offence and is liable on convictionto a fine of not less than 10,000 Birr and toimprisonment for a term of not less than two (2)years and not more than five (5) years.

3) Nothing in this Article shall prevent a taxationofficer from disclosing -(a) any document or information to-

(i) any person where the disclosure is neces-sary for the purposes of this Proclamationor any other fiscal law;

(ii) the Auditor-General where the disclosureis necessary for the performance of dutiesentrusted to it by law.

(iii) the competent authority of the govern-ment of another country with whichEthiopia has entered into an agreementfor the avoidance of double taxation orfor the exchange of information, to theextent permitted under the agreement;

(iv) the Ethics and Anti-Coumiption Com-mission where the disclosure is necessaryfor the performance of duties entrusted toit by law.

(v) a law enforcement agency not describedabove where the Minister of Revenueissues written authorization to make dis-closures necessary for the enforcement ofthe laws under the agency's authority; or

(b) information which does not identify a specificperson to any person in the service of the Statein a revenue or statistical department wheresuch disclosure is n6cessary for the perfor-mance of the persoq's official duties.

54. Unauthorized VAT CollectionAny person not authorized to collect tax under thisProclamation who collects or attempts to collect tax (oran amount the person describes as tax) commits anoffence and is liable on conviction to a fine of not lessthan 50,000 Birr and to imprisonment for a term of notless than (5) five years and not more than (10) ten years.

55. Aiding or AbettingA person who aids, abets, incites, or conpsires withanother person to commit a violation of this Proclamationalso commits a violation of this proclamation. Thatperson may be subject to prosecution and, on conviction,to a fine and imprisonment, not in excess of the amount offine or period of imprisonment provided for the offenceaided or abetted.

56. Offences by Entities

1) Subject to Sub-Article (3), where an entity commitsan offence, every person who is a manager of thatentity at that time is treated as having committed theoffence and is liable to a penalty under thisProclamation.

1~' ?ij"i.~r,~~r.~.1ut.A ''.:It.)- .:I,j.ilJ~'1'C 0r (t).~?; +1 I~n~ '}.9".

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Federal Negarit Gazeta - No. 33 4thJuly, 2002- Page 1863

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2) Subject to Sub-Article (3), where an entity commits

an offence by failing to pay an amount of tax,including an amount treated by this Proclamation asthough it were tax, every person who was manager ofthat entity at that time or was a manager within 6 (six)months prior to the date of commission is jointly andseverally liable with that entity and that other personto the Authority for the amount.

3) Sub-Articles (1) and (2) do not apply where,

(a) the offence is committed without that person's

knowledge or consent; and(b) that person has exercised the degree of care,

diligence and skill that a reasonably prudentperson would have exercised in comparablecircumstances to prevent the commission of theoffence.

4) In Sub-Articles (1)"and (2); "manager" means,.

(a) in the case of a partnership, a partner or manager

of the partnership or a person purporting to actin either of those capacities;

(b) in the case of a company, a director, manager, or

officer of the company or a person purporting toact in any of those capacities; and

(c) in the case of an association of persons, a

manager or a person purporting to act in thatcapacity..

57. Offences by Receivers

1) A person who fails to comply with the requirements

of Article 36, Sub-Article (4) commits an offenceand is liable on conviction to a fine of 5,000 Birr andto imprisonment for (1) one year.

2) Where a person is convicted of an offence under

Sub-Article 1 (one) for failing to set aside an amountas required under Sub-Article (4) of Article 36, thecourt may, in addition to imposing a fine and prisonsentence, order the convicted person to pay, to theAuthority, an amount not exceeding the amountwhich the person failed to set aside.

58. Improper Tax Debit and Tax Credit Notes1) A registered person who fails to provide a tax credit

note or tax debit note as required by thisProclamation, commits an offenc~ and is liable onconviction, to a fine of 10,000 Birr and to imprison-ment for (1) one year.

2) A person who provides a tax credit note or tax debit

note otherwise than as provided for in thisProclamation commits an offence and is liable onconviction,(a) where the failure was made knowingly or

recklessly, to a fine of 20,000 Birr to imprison-ment for (3) three years; or

(b) in any other case, toa fine 10,000 Birr and to

imprisonment for (1) one year.

1~' ii;(:sr~! ~1.&.A ~:M:" ;JfLlIJ~1'C -9r (akn +1 !ifU 't ,?8 Federal Negarit Gazeta - No. 33411>July, 2002- Page 1864

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I.

59. Publication of Names

1) The Authority shall from time to time publish by

notice in the Gazette a list of persons who have beenconvicted of offences under any of the Articles 48 to58.

2) Every list published in terms of Sub-Article (1) shall

specify -(a) the name, address, and principal enterprise of

the person;(b) such particulars of the offence as the Authority

may think fit;(c) the tax period or tax periods in which the

offence occurred;(d) the amount or estimated amount of the tax

evaded; and(e) the amount, if any, of the additional tax im-

posed.

Section 13Miscellaneous Provisions

60. Schemes for Obtaining Tax Benefits

1) In this Article:-

"scheme" includes an agreement, arrangement,promise, or undertaking whether express or implied

and whether or not enforceable, or intended to beenforceable, by legal proceedings, and any plan,proposal, course of action, or course of conduct; and

"tax benefit" includes(a) a reduction in the liability of any person to pay

tax;(b) an increase in the entitlement of a person to an

amount of tax creditable under Article 21 or to arefund of tax; or

(c) any other avoidance or postponement of

liability for the payment of tax.2) Notwithstanding anything in this Proclamation, if

the Authority is satisfied that a scheme has beenentered into or carried out where -(a) a person has obtained a tax benefit in connec-

tion with the scheme; .and(b) having regard to the substance of the scheme, it

could be concluded that the person, or one ofthe persons, who entered into or carried out thescheme, did so for the sole or dominant purposeof enabling the person to obtain the tax benefit,the Authority may determine the liability of theperson who has obtained the tax benefit and ofany other person related with the scheme as if

the scheme had not been entered into or carriedout, or in such manner as in the circumstances

the Authority considers appropriate for theprevention or reduction of the tax benefit.

1K"iit$f36 ~A ~~~ ~n... .1'C« M n +, !itf2i ".,.. Federal Negarit Gazeta-- No. 334111July, 2002- Page 1865

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61. Currency Conversion

1) For purposes of this Proclamation, all amounts of

money are to be expressed in BiIT.2) Where an amount is expressed in-a currency other

than Birr,(a) in the case of imports, the amount shall be

converted at the exchange rate as determinedunder the customs legislation of Ethiopia; or

(b) in all other cases, the amount shall be converted

at the exchange rate that applies between thecurrency and theBirr at the time the amount istaken into account under this Proclamation.

62. .Registriltion of Goods

Where any form of registration is-required under any lawin respect of goods, no registering authority responsiblefor such registration under such law shall effect suchregistration upon change of ownership or importationinto Ethiopia of the registerable goods unless the personappiying for registration produces to such registeringauthority: -(a) a Customs Declaration showing that tax which is

payable under this Proclamation has been paid inrespect of the import of the goods into Ethiopia, or aCustoms docurpent showing that no tax is payableunder the Proclamation in respect of such impor-

..

tation of the registerable goods in consequence ofwhich the registration is required; or

(b) a declaration, in such form as the Authority may

prescribe, issued by any registered person whosupplied such goods in consequence of which theregistration is required, certifying that the taxpayable under this Proclamation has been, or willbe, paid by such person; or

(c) a certificate issued by the Authority, to the effect

that .the supply or import of the registerable goodswas an exempt supply or exempt import.

63. Transitional Provision1) A registered person wo, within 6 months prior to the

coming into force of this proclamtion, has goodstaxed as per the previous law at his disposal, ~hall beentitled to a tax benefit under Article 21 of thisProclamation;

2) The manner in which the credit granted under this

Article is to be applied shall be determined byRegulations to be issued by the Council of Ministers.

64. Directives and Regulations

The Council of Mi!1isten, shall issue regulations for theproper interpretation of this Proclamation or for thecarrying out of any powers delegated ~ it under this

Proclamation, and the Minister of Finance and EconomicDevelopment shall issue directives for the proper im-plementation of this Proclamation.

1Jr i1(~f~ lJ.~A. ~;J~"" :Jtl.1IJ'*'1'C tr c\k n +1 111121 ,.,.. Federal Negarit Gazeta - No. 334111July, 2002- Page 1866

~~. "",ouifci. ~IJ h'P~ OP'to"~ h'Pt\OT1."' 1.9"1:f1iI~'i

. h.hl8~11:J-hlah'P~ 4l!C ~ftfit~ /'A'1.+if7it\/

+IPC!l.AII.

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65. Repeal

1) The Sales and Excise Tax Proclamation No. 68/93(as amended) shall be rescinded as from the day onwhich this Proclamation becomes of full force andeffect.

2) Tax payable under the Sales and Excise TaxProclamation but unpaid until the day thisProclamation comes into force shall continue to becollected pursuant to said Proclamation.

~. fh'P:( +L'''t~T 66. Entry into Force~U h'P~ h:J-'1"p' tlr .,., Iifj~ "9"'1.9"1: fO'i This Proclamationshall come into force as of the 15tday~1I''iAIl of January,2003.

hJlla hOt] ()~ tl1; .,., Iifj~ ,.9".

"IC'" mA1.1.f"C1.la

f1\.Tf"*' &..1..to"'e Jl'l"htof\lce tT1IA.h,.~II.~'T

Done at Addis Ababa this 451day of July, 2002.

GIRMA WOLDE GIORGISPRESIDENT OF THE FEDERAL

DEMOCRATIC REPUBLIC OF ETlllOPIA

{lCV1~ M9'" ",.,.OtJ' I:C~"" ;l-.,.ooaERHANENA SELAM PRINTING ENTERPRISE