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AoY-u&-A '1;JtT ;JUffJFEDERAL NEGARIT GAZETA

OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

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"Jlia "Oll-;t-IJUfP'1)1+' ntn~9111Year No. 21

ADDIS ABABA-3IIt December. 200201\. -rf" Ii f &..1..&." ce Jl 'JUtJ&.l\f'f 6 r-f1l\.tJ

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CONTENTS

Proclamation No. 308/2002Turnover TaxProclamation , """""" : ,. , Page 2024

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PROCLAMATION NO. 308/2002TURNOVER TAX PROCLAMATION

WHERb"AS, it has been determined that there shall beenacted a value-added tax to enhance saving and investment,minimize the damage that may be caused by attempts to avoidor evade taxes, stimulate economic growth, and improve therelationsl}ip between Gross Domestic Product and Govern-ment Revenue;

WHEREAS, administrative feasibility considerations limitthe registration of persons under the value-added tax to thosewith annual taxable transactions the total value of whichexeeds 500,000 Birr;

WHEREAS, an equalization turnover tax imposed onpersons not registered for value-added tax allows them tofulfill their obligations and also enhances fairness in commer-cial relations and makes complete the coverage of the taxsystem;

NO~ THEREFORE, in accordance with Article 55(1)and (11) of the Constitution, it is hereby proclaimed as

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SECTION ONEGeneral

1. Short TideThis Proclamation may be cited as the "Turnover TaxProclamation No.308/2002.'

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2. Definitions

1) For the purpose of this Proclamtion, unless defined

otherwise in this Proclamation, terms used herein

shall have the meaning as defined in the Value-

Added Tax Proclamation No. 285/2002 (hereinafter

referred to as the "V AT Proclamation");

2) "Gross Receipts" means income, without reduction

of expenses, including the cost of goods sold;

3) "Taxable Transaction" means a :.upply of goods or

a rendition of services in the course or furtherance of

a taxable activity, other than an exempt transaction

described in Article 7 of this Proclamtion;

4) "Person not Registered for VAT" means a person

who, according to Article 16 and 17 of the Value

Added Tax Proclamation, is not registered by reason

of his annual turnover being below Birr 500,000 or

threshold set by the Minister; or by reason of not

having applied for voluntary registration;

5) "Person" shall mean any individual, body or

association of persons and includes a business

representative residing and doing business in

Ethiopia on behalf of the principal;

6) "Body" shall mean any company, registered part-

nership, entity formed under foreign law resembling

a company or resgistered partnership; or any public

enterprise Or financiai agency that carries out

business activities including body of persons cor-

porate or unincorporated whether created or recog-

nized under a law in force in Ethiopia or elsewhere,

and any foreign body's business agent doing

busicess in Ethiopia on behalf of the principal;

7) "Goods" means any type of goods or commodity

that has exchange value, utility and brings about

satisfaction, and includes animals;

8) "Sale" means exchange of goods in cash or in kind

and rendering of services upon receipt of payment,

and includes goods supplied or services rendered by

the taxpayer free of charge;

9) "Service" means work done for others which does

not result in the transfer of goods;

10) "Tax Authority " means the Federal Inland

Revenue Authority and the tax authorities of the

Regional States and city administrations;

11) "Tax" means Turnover Tax payable whenever

transaction of sales of goods and services is carried

out;

12) "Taxpayer"means a person obliged to collect and

transfer Turnover Tax to the Tax Authority;

13) "Ministry" and "Minister" means the Ministry

and Minister of Finance and Economic Develop-

ment, respectively.

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3. Scope

Unless exempted under Article 7 of this Proclamation ordirectives to be issued thereunder, Turnover Tax shall bepayable on goods supplied and services rendered" by

persons not registered for Value Added Tax.

SECTION TWOThe Rate of Tax and Exemption

4. Rate of Turnover Tax

The Turnover Tax shall be:1) 2% (two percent) on Goods sold locally2) for Services rendered locally;

(a) 2% (two percent) on Contractors, grain mills,

tractors and combine-harvesters;(b) 10% (ten percent) on others.

5. Base of Computation of the Turnover TaxBase of computation of the Turnover Tax shall be thegross receipts in respect of goods supplied or servicesrendered.

6. Obligation to Collect and Transfer the Turnover TaxA person who sells goods'imd services has the obligationto collect the Turnover Tax from the buyer arid transfersame to the Tax Authority. Hence, the seller is principallyaccountable for the payment of the tax.

7. Exemption1) The following shall be exempted from Turnover

Tax:(a) the sale or transfer of a dwelling used for a

minimum of two years, or the lease of adwelling;

(b) the rendering of financial services;(c) the supply of national or foreign currency

(except for that used for numismatic purposes)

and of securities;(d) the rendering by religious organizations of

religious or other related services;(e) the supply of prescription drugs specified in

directives issued by the relevant governmentagency, and the rendering of medical services;

(f) the rendering of educational services provided

by educational institutions, as well as child care

services for children at pre-school institutions;(g) the supply of goods and rendering of services in

the form of humanitarian aid;(h) the supply of electricity, kerosene, and water;(i) the provision of transport;(j) permits and license fees;(k) the supply of goods or services by a workshop

employing disabled individuals if more than

60% of the employees are disabled; and(I) the supply of books.

2) The Minister of Finance and Economic Develop-

ment may, by directive, exempt other goods andservices.

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3) The Minister of ~~venue may, by directive, deter-mine the scope and manner of exemptions providedfor, in this Article.

SECTION THREE

Administrative Procedures

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

timely payment of Turnover Tax and presentation ofa return to the Authority by the prescribed deadlinerests on the tax payer in accordance with thisProclamation.

2) The Turnover Tax is administered by the TaxAuthority.

9. RecordsTax payers subject to the record-keeping requirement ofArticle 48 of the Income Tax Proclamation No. 286/2002shall keep the records prescribed therein for use indetennining Turnover Tax.

10. Filing of Turnover Tax Return and Payment1) Tax payers subject to Turnover Tax shall:

(a) file a Turnover Tax return with the TaxAuthority within one month after the end ofevery accounting period;

(b) pay the tax for every accounting period by thedeadline for filing the Turnover Tax return.

2) For purposes of this Article "Accounting period"shaH mean:(a) for taxpayers classified as category' A' tax-

payers under the Income Tax proclamation No.286/2002, but are not required to register forVAT, the calendar month;

(b) for category "B" taxpayers who are requiredto keep records under the Income TaxProclamation No. 286/2002 each three monthperiod commencing from the first day of theEthiopian fiscal year or when approved by theTax Authority, the first day of the Gregoriancalendar year;

(c) for Category "C" taxpayers, who are notrequired to keep records under Income TaxProclamation No. 286/2002, the fiscal year.

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

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

2) If, for any reason, the books of account are unaccep-table to the Tax Authority, or if the tax.payer fails tosubmit same when requested by the Tax Authority,or if no books of account and supporting documentsare maintained, the Tax Authority shall assess the taxon the basis of infonnation available to it or on thebasis of market price of such good or service in thelocal market or if the market price is unknown, on thebasis of the market price of an equivalent good orservice.

3) A presumptive turnover tax shall be payable byCategory' 'C" taxpayers who are not required tokeep records. The base for the presumptive turnovertax. shall be the total turnover used as base for theincome tax.

1K' 11£.~~ ~1.t-&\ '1.76.}o.7ILtIJ~'I'C ~l! ;1'UUffP ~I +'} linG ~.9'" Federal Negarit Gazeta-No. 2131'" December, 2002-Page 2028

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4) The assessment made shall be prepared in an

assessment notification and be delivered to the taxpayer. Delivery of the assessment notification shall

be made in accordance with provisions of the IncomeTax Proclamation.

5) If the Authority makes an additional assessment

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

notice and demand the person assessed does not pay

the additional assessment or appeal the assessment asprovided under Article 21, the person is in default.

6) If the Tax Authority fails to assess the tax and notify

the taxpayer of the amount still due within five yearsfrom the date of declaration and payment of the taxby the taxpayer in accordance with Article 8 of this

Proclamation, the tax so paid shall be final andconclusive. In case where the taxpayer has not

declared his income or has submitted a fraudulentdeclaration, no time limit provided in any other law

shall bar. the assessment of the tax by the TaxAuthority.

SECTION FOUR

Collection Enforcement

12. Powers and Duties of the Tax AuthorityIn addition to the powers vested in it in other provisions

of this Proclamation, the Tax Authority shall have thefollowing powers and duties:1) The implementation and enforcement of this

Proclamation shall be the duty of the Tax Authority.2) Notwithstanding any provisions to the contrary in

any other law, the Tax Authority shall be em-

powered to investigate any statements, records and

books of account submitted by any taxpayer at any

time by:(a) sending duly accredited inspectors to check the

statements, records and books of account, orany 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 hours

at any reasonably convenient tax office andanswer any questions relating thereto;

(c) requiring any person including a municipality,

body, financial institution, department or

agency of Federal or Regional Government to

4isclose particulars of any information ortransactions relating to a certain taxpayer.

13. Seizure of Property to Collect Tax1) Subject to Sub-Article (4) of tilis Article, if any

person liable to pay any tax imposed by thisProclamation is in default under Sub-Article (5) ofArticle 11 or Sub..Article (2) of Article 21, it shall be

lawful for the Authority to collect such tax (and suchfurther amount as shall be suffient to cover the~1CnenY_4;of thp. ~~i7.II1?) hv ~i7.inp ;tnv nmrwtv

,,, 11£.lilU.~A ~?tT ?UnJ .1'C Iii ;t'U"tP- II .,., Iilf7G 'H". Federal Nega:it Gazeta - No. 21 31"December.2002-Page 2029

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2) For purposes of this Section, the term "seizure"includes seizure by any means, as weli as collectionfroin a person who owes money or property to theperson liable for Turnover Tax. Except as providedin Sub-Article (3) and (6), a seizure shall extend onlyto property possessed by and obligations owed tothetaxpayer existing at the time the seizure is made. TheAuthority may request the attendance of a policeofficer during the seizure. Where the Authorityseizes any property as provided herein ;:;.bove.it shallhave the right to sell the seized goods at publicauction or in any other manner approved by theAuthority not less than 10 days after the seizure.except that when the goods seized are perishable. theAuthority can sell the goods after any reasonableperiod having regard to the nature of the goods.

3) Whenever any property on which seizure had beenmade is not sufficiep~ to satisfy the claim for whichseizure is made, the Authority may, there after and asmay be necessary, proceed to seize other propertyliable to seizure of the person against whom theclaim exists until the amount due from such person,together with all expenses, is fully paid.

4) Seizure under Sub-Article (1) on property of anyperson in default with respect to any unpaid tax maybe made only after the Authority has notified suchperson in writing of the intention to make suchseizure. The notice shall be delivered not less thanthirty 30 (thirty) days before the day of the seizure.

5) If the Authority makes a finding that the collection ofthe tax is in jeopardy and demanded for immediatepayment of such tax (without regard to the 30 daysperiod) provided in Sub-Article (1) and )4) uponfailure or refusal of the taxpayer to pay such tax,collection of the tax by seizure of property beforesuch period shall be lawful.

6) If a seizure has been made or is about to be made onany property, any person having custody or controlof any books or records containing evidence orstatements relating to the property subject to seizureshaH, on demand, exhibit such books or records tothe Authority.

7) Any person in possession of (or obligated withrespect to) property subject to seizure shall, ondemand, surrender such property to the Authority (ordischarge such obligation), except such part of theproperty is, at the time of such demand, subject to aprior secured claim of creditors and subject to anattachment or execution under any judicial process.

8) Any person who fails or refuses to surrender anyproperty subject to seizure, when demanded by theAuthority, shall be personally liable to the govern-ment in a sum equal to the value of the property notso surrendered, but not exceeding the amount of taxfor the collection of which seizure has been sought(together with costs and interest on such sum).

9) In addition to the personalliablity imposed by Sub-Article (8), if the failure or refusal to surrender iswithout reasonable cause, such person shall be liablefor an additional charge equal to fifty per cent (50%)of the amount recoverable under Sub-Article (8),

,.. l1ti L1.1rA. ";1&-1-.nLtIJ rII'1'Cftli :hJ"IP' ftl +, Iif1~ ,.9". Federal Negarit Gazeta-No. 2131"December, 2002-Page2030

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"'~\1o.fth) Oh.Uft- ID-lt'l' f"'f.1~'f:C~+ QAh1.t-f-) (III"'" O"";l-CD-JPC f"t1~1IP) f"..,., (aID-')-o~+ f"'l.J'lt-l-.-sf:CI OJ.e,.

10) Any person in possession of Ithe property of ataxpayer in default and who surrenders such property

or pays the tax in occordance with this Article to

which the owner is liable, shall be discharged fromany obligation or liability to the deliquent or to any

other person arising from such surrender or payment.

14. Preferential Claim to Assets1) Subject to the prior secured claims of creditors, the

,Authority has a preferential claim upon the assets of

the person liable to pay the tax until the tax is paid

from the date on which tax becomes due and payable

under this Proclamation.2) Where a person is in default of paying tax, the

Authority may, by notice in writing, inform that

person of the Authroity's intention to apply to theRegistering Authority to register a security interest in

any asset which is owned by that person, to cover any

unpaid tax together with any expense incurred inrecovery proceedings.

3) If the person on whom a notice has been served under

Sub Article (2) fails to pay the amount specified inthe notice within 30 days after the date of service, theAuthority may, by notice in writing, direct theRegistering Authority that the asset, to the extent of

the defaulter's interest therein, shall be the subject ofsecurity for the total amount of unpaid tax.

4) Where the 1).uthority has served a notice on the

Registering Authority under Sub-Article (3), the

Registering Authority shall, without fee, register the

notice of security as if the notice were an instrument

of mortgage over or charge on, as the case may be,

such asset, and such registration shall, subject to anyprior mortgage or charge, operate while it subsists in

all respects as a legal mortgage over or charge on theasset to secure the amount due.

15. Taxpayer's Safeguards

Any property seized under this Section 4 shall be seized,

held, and accounted for only by the Authority. No other

agency of the government may require the property

seized to be transferred or given over to it for any cause

whatsoever. If any property seized is sold, any portion of

the proceeds in excess of the person's liabilities shall be

returned promptly to the owner.

16. Duties of Receivers1) In this A..rticle"receiver" means a person who, with

respect to an asset in Ethiopia of a registered person,

is:(a) a liquidator of a company;(b) a receiver appointed out of court or by a court;

(c) a trustee for an unrehabilitated insolvent;(d) a mortgagee in possession;

(e) an executor of a deceased's'estate; or

,~ litc9li L1.J,.1\ ~.7t-r .7",11).'I'C ~li :1"U"lP ~I"" !iin~ '-9"- Federal Negarit Gazeta - No.2131,tDecember, 2002-Page 2031

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(t) any other person conducting a business on

behalf of a person legally incapacitated.2) A receiver shall notify, in writing, his appointment or

his possession to the Authority within 14 days afterhaving been appointed to the position or takenpossession of an asset in Ethiopia, whichever firstoccurs.

3) The Authority may, notify a receiverin writing oftheamount which appears to the Authroity to besufficient to provide for tax which ii. ur will becomepayable by the person whose assets are in thepossession of the receiver.

4) A receiver:(a) shall set aside, out of the proceeds of sale of an

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

(b) is liable to the extent of the amount set aside for

the tax of the person who owned the asset; and(c) may notwithstanding any provision of this

Article pay any debt that has priority over thetax referred to in 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, thereceiver fails to comply with the requirements of thisArticle.

17. Notification of ChangesA registered taxpayer shall notify the Authority, inwriting, of

(a) any change in the name, address, place ofbusiness, constitution, or nature of the principaltaxable activity or activities of the person; and

(b) any change of address from which, or name inwhich, a taxable activity is carried on by theregistered person,

within 21 days following such change.

SECTION FIVE

Appeal Procedure

18. Review Committee

Members of the Review Committee shall be appointed by

the Minsiter of Revenue or the competent authority of theregional government, as appropriate, upon the recom-

mendation of the head of the Authority.

19. Powers and Duties of the Review Committee1) The Review Committee shall be accountable to the

head of the Authority and shall have the followingduties:

"

(a) to examine and decide on all appolications

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

(b) to gather any written evidence or information

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

tly has dealt. with the assessment, to appearbefore it to answer questions about the caseunderi~investigation;and

1W lit01 U.~A 'I;Jt+ ;JUtIJ .'1'C ~li :,"U"IP' trl+' Iin~ ,.,.. Federal Negarit Gazeta-- No. 21 3111December, 2002--Page 2032

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(d) to review the accuracy, completeness, andcompliance with this Proclamation. of the taxassesment made by the Authority.

2) The Committee shall only review applicationssubmitted to it within 10 days of receipt of taxassessment notification.

3) The Head of the Tax Authority may approve therecommendations or remand the case, with hisobservations, to the Committee for further review.

20. Waiver of PenaltyThe Review Committee may waive administrativepenalties, wholly or partly, in accordance the directivesto be issued by the Minister of Revenue or by thecompetent authority of the regional government, as maybe appropriate.

21. Appeal1) Any person who objects to an additional assessment

made.by the Authority has the right to appeal, within30 days from the receipt of assessment notification,or from the date of decision of the Review Commit-tee, to the Tax Appeal Commission by depositing incash with the Authority 50% (fifty percent) of theadditional tax assessed.

2) If a person appeals in accordance with Sub-Article(1) and the Tax Appeal Commission determines that

the person is liable for the additional assessment, heshall be in default unless he pays the additionalassessment determined by the Tax Appeal Commis-sion within thirty (30) days of the rendition of such adecision.

3) If no appeal is made within the period prescribed inSub-Article (1) of this Article, the Additionalassessment of the tax made by the Authority shall bedeemed to be correct and final, and shall beimmediately payable.

4) Without prejudice to Sub-Article (1) of this Article,the provisions of the Income Tax Proclamationrelating to appeals shall, mutatis mutandis, apply toappeals regarding taxes imposed by thisProclamation.

22. Burden of ProofThe burden of proving that an assessment is excessive orthat a decision of the Authority is wrong is on the personobjecting to the assessment or decision.

SECTION SIXAdministrative Penalties

23. Penalties for Late Filing1) Except as otherwise provided in this Proclamation, a

person who faiis to file a timely return is liable for apenalty equal to 5 per cent of the amount of taxunderpayment for each month (or portion thereof)during which the failure continues, upto 25%(twenty five per cent) of such amount.

2) The penalty under Sub-Article (1) of this Article islimited to 50,000 Birr for the first month (or portionthereot) in which no return is f1led.

3) For purposes of this Article, an u~derpayment of taxis the difference between the -tax required to be

shown on the return and the amount of tax paid.bythe due date.

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

smaller of the two amounts:.

(a) 10,000 birr (ten thousand Birr);(b) 100 percent of the amount of tax required to be

shown on the return.24. Late Payment Interest

(a) If any amount of tax is not paid by the due date, theperson liable is obliged to pay interest on suchamount for the period from the due date to the datethe tax is paid.

(b) The interest rate under Sub-Article (a) ofthis Articleis set at 25% (twenty five percent) over and abovethe highest commercial banks, lending interest ratethat prevailed during the preceding quarter. .

SECTION SEVENCriminal Offences

25. Procedure in Tax Offence CasesA tax offence under this Section is a violation of thecriminal law of Ethiopia and shall be charged,prosecuted, and appealed in accordance with theEthiopian Criminal Procedure Code.

26. Tax EvasionA person who evades the declaration or payment of tax,commits an offence and, in addition to any penalty underSection 6, may be prosecuted and, on conviction, besubject to imprisonment for a term of not less than 5 (five)years.

27. Making False or Misleading Statements. 1) A taxpayer who,

(a) makes a false or misleading in a materialparticularstatement to a tax officer of theAuthority, or

(b) omits, from a statement made to an officer ofthe Authority, any matter or thing withoutwhich the statement is misleading in a materialparticular.

commits an offence and is liable on conviCtion.2) Where the false statement or omission is made

without reasonable excuse,(a) and if the inaccuracy of the statement undetec-

ted would have resulted in an underpayment oftax by an amount not exceeding 1,000 Birr, thetaxpayer shall be subject to a fine of not lessthan 10,000 Birr and not more than 20,000 Birr-and imprisonment for a term of not less thanone (1) year and not more than three (3) years:and

(b) if the underpayment of the tax is in an amountexceeding 1,000 Birr, to a fine of not less than20,000 birr and not more than 100,000 Birr,and to imprisonment for aterm of not less thanthree (3) years and not more than five (5) years,

3) Where the false statement or omission is madeknowingly or recklessly,(a) and if the inaccuracy of the statement were

undetected would have resulted in an under-paYlI}Cntof tax by an amourtt not exceedinll,qOOBirr, the taxpayer shall be subject to a fine

/of not less than 50,000 Birr and not more than100,000 Birr and to imprisonment for a tenn ofnot less than five (5) years an4not more than ten(10) years; and

,.. P:il ~A );J~+ ;JlillJ ..-rc Ii :f"1MP'r. ..., !iif2~ ,.,.. Federal Negarit Gazeta- No. 21 31"December,2002-Page 2034

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'+tOA'.,.,.

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

exceeding 1,000 BiIT, the tax payer shall be

subject to a fine of not less than -=75,000BiIT

and not more than 200,000 BiIT, and to

imprisonment for a term of not less than ten(10) years and not more than fifteen (15) years.

28. Obstruction of Tax Administratjon

1) Any person who:

(a) ohstructs or attempts to obstruct an officer of

the Authority in the perfoITnance of duties

under this Proclamation, or(b) otherwise impedes or attempts to impede the

implementation of the Proclamation,

commits an offence and is liable, on convic-

tion, to a fine of not less than 1,000 BiITand not

more than 100,000 BiIT, and to imprisonment

for a term of two (2) years,

2) For the purposes of Sub-Article (1), the following

and other similar actions are considered to constitute

obstruction:(a) refusal to satisfy the request of the Authority

for inspection of documents, repOlts, or other

information relating to a taxpayer's income

producing activities;

(b) non compliance with the Authority's request

to report for an interview;(c) interference with a tax officer's right to enter

the taxpayer's business premises.

.29. Failure to Notify

A person who fails to notify the Authority of a change as

required by Article 17 commits an offence, and on

conviction:

(a) where the failure was made knowingly or reckles-

sly, is liable to a fine of not less than 10,000 Bin-and

to imprisonment for one year; or(b) in any other cases, to a fine of not less than 5,000

Bin- and to imprisonment for a term of six months.

30. Offences by Tax Officer1) Any tax officeror former taxationofficer employed

in carrying out the provisions of this Proclamationwho:(a) directly or indirectly asks for, or receives in

connection with any of the taxation officer'sduties. a payment or reward, whetherpecuniaryor otherwise,or promiseor security

for that payment or reward, not being apayment or reward which the officer is law-

. .fully entitled to receive, or

1A"1n:1j)~U-I,.l\ ";J~T ;tu.1IJ""'C fti :t"U"IP ftl .,., IIlf2~ ,.,.. Federal Negarit Gazeta - No.213111December,2002-Page 203S

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(b) enters into or acquiesces in anagreement t9 do .

or to abstain frQmdoing, permit, conceal, or -

connive 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 of not more than 50,000 Birr and to .imprisonment for a term of not less than ten(10) years and not more than twenty (20) YC",Ms.

2) A tax officer or a former tax officer engaged 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 his representative,

any matter in respect of another person, thatmay, in the exercise of the taxation officer'spowers or the performance of the taxationofficer's duties under the said provisions, cometo the taxation officer's knowledge; or

(b) permits any other person to have access torecords in the possession or custody of theAuthority, ~xcept in the exercise of thetaxation officer's powers or the .performanceof the other's duties under this Proclamation orby order of a court;

commits an offence and is liable on conviction to afine of not less than 10,000 Birr and to imprisonmentfor a tenn of not less than two (2) years and not morethan five (5) years.

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

(i) any pef!~onwhere 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 dutiesentrustedto it by law;

.

(Hi) 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-Corruption Commis.,sion where the disclosurcds necessary forthe performance of duties entrusted to itby 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) to any person in the service of the State in arevenue or statistical department, informationwhich does not identify a specific personwhere such disclosure is necessary. for theperformance of the person's official duties.

31. Unauthorized Tax 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 less$an 50,000 Birr and to imprisonment for a term of notlessthan five (5) years and not more than ten (l0) years.

1A" 1i£.01 t.1.~A ~;J6:" .?It.tIJ4I1'CIii :l'UUfP' II +, Iii11~ 'H". Federal Negarit Gazeta - No. 21 31" December, 2002-Page 2036

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32. Aiding or Abetting

A person who aids, abets, incites, or conspires withanother person, to commit a violation of this

Procla.mation, also commits an offence. He may be

subject to prosecution and, on conviction, be liable to a

fine and imprisonment, not in excess of the amount of

fine or period of imprisonment provided for the ottence

aided or abetted.Offences by Entities

1) Subject to Sub-Article (3) of this Article, where. an

enitity commits. an offence, the person who is a

manager of that entity at the time the offence is

committed, is treated as also having committed the

same offence and is liable to a fine and imprison-

ment under this Proclamation.2) Subje~t to Sub-Article (3) of this Article, where an

entity commits an offence by failing to pay an

amount of tax, including an amount treated by this

Proclamation as though it were tax, the person who

was a manager of that entity at the time of such

failure or was a manager within six (6) months prior

to the date of commission is jointly and severally

liable with that entity and that other person for the

amount due to the Authority.

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 reasonable prudent

person would have exercised in comparable

circumstances to prevent the commission of

the offence.

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 purpor-

ting to act in either of those capacities;(b) in the case of a company, a director, manager,

or officer of the company or a person purpor-ting to act in any of those capacities;

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

manager or a person purporting to act in that

capacity .

34. Offences by Receivers1) A person wh9 fails to comply with the requirements

of Article 16(4) commits an offence and is liable, onconviction to a fine of 5,000 Birr and to imprison-

ment for a term of one (1) year.2) Where a person is convicted of an offence under Sub

Article (1) of this Article for failing to set aside an

amount as required under Article 16(4), the courtmay, in addition to imposing a fine and prison

sentence, order. the convicted person to pay. to the

Authority, an amount not exceeding the amount

which the person failed to set aside.

..,.. lit¥JI'IJ.j,.A ~,,7~"",,7 +rc II tI?1,- n +1 Iln",", Federal Negarit Gazeta- No. 21 31- December,2002-Paae 2037

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M- '-ttn-N-P'A"nIi"':" At'~ A.A-~ A'+1'f h+1"'" O"'''''1~"'ltla-k M."".-z. f A~O~t .",. Mh-MI.C"h',,,,~ ID"" 0111. cICI\"~ +PC Uti/Ilftl",+"" ~I(A) f8.,1"t"~rb11"'~ alt.., "..~b+nIA" :l"hhtM:10"'. -U-OIWoA ~, f"fl:t1Jt»AIfJ' +"'",",,:J-A II

.,- (IfI(IfI~I"'''''''''''' '-Ann

nil"" "'ltla+CAlt..,"'..~ J\ua,. M~ -"~I,.~ A-rcD-nJ+,.~~..

iJI- "AtIfI1fc~u "'''~ O,-~ UIrPA"" Xrt: ~u ,." :l"hh"'~' +rc: II/IIN'I ~'~+If'ItA)+6C1LA-

3S. Publication of Names1) The AuthoritY shall from time to time publish '.by

notice in a Gazette a list of pei10ns who have beepconvicted of offences under any of the provisions ofArticles 2S to 34 of this proclamation.

, 2) The list published in terms of Sub-Article (I) shall

specify:(a) die name, address. and principal enterprise of

the person;(b) such particularsof 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. or the additional tax im-

posed.

SECTIONEIOIITMiscellaneousProvisions

36. Duty to Cooperate1) All F~ and Regional government authorities

Ibd their agencies, Bodies. Kcbcle Adminisb'ationsand Associations shall have the duty to cooperate

,.withthe Tax Authority in the enforcement of thisProclamation.

2) (a) No Ministry. Municipality,Department or Of-fice of ptcFcderal Q~Regional Government

,

shall issue or renew any license to any,~payer, unless the appl~t produces a,

Certificatefroln the Tax Authority to the effect,that tax due Inrespect of-the preceding year oryears have been paid, or where the taxpayer isseeking lice~ for the fIrSt time a taxpayer

,

identification number (TIN) issued by the TaxAuthoritX. unless an appeal, is pending, ortime for payment is extended by the TaxAuthority.

(b) If the Tax Authority 'refuses to issue a cer-tificate it shaQ.on demand by the applicantforthe liCense,provide him or it with a writtenstatementof its reasons therefor.

(c) Any applicantwho is aggrievedby the reasonsstated by the Tax Authority for refusing toissue a certificateor by the revocationof his orits licensemay appeal in writins to the ReviewCommittee. '

37. Po.wroftheMinisterThe Minister may, waive. in whole or in part, the taxlevied under this Proclamation for economic.soeial oradministrative reasons or for reasons specific~LUftderAlticre'C(b) of

'the InCQme Tax Proclamation No. 28612002.'

,

,3.~ Po..- to Issue Directivt:8The Minister of Revenue may issue directives for theproper implementation of this Proclamation.

39. IllflNJ '

The Salea and Excise Tax Proclamation No. 6111993 (as,1IIIeDded)shall bO .acindedas &om the day on which... Procl8mation becomes 'of full foR:e and effect.

,~,' ;11t..~~~;Jt+ ;JJI,"! ".,C Ii :f"UUfP' II +,11126,.,.. Federal Negarit Gazeta- No.2131"December,2002-Page 2038

,. fOD7r;J1&1~';J1. 40. TransitoryProvisions

1-U "":E- hOD~'i"-J:04."" "'1-hLA f+l. f1if~ ~bi\ All sales tax due prior to the coming-into force of this

01if~'i" hob"'1-" ~hit hCf:E- 0"'~~11tD- ODlPl.""Proclamation shall be collected in accordance with the

f"tltOltofl ""'i"AIISales and Excise Tax Proclamation.

41. Effective Dateiji. "CP:( f"'-''iO'''' "Lit. ThisProclamationshallenter into force as of the 31"day

1-U "''':E- h~U"'P' 3'1 +, Iiil'?; ,.9'" 'f.9'"r:fIJ'i of December,2002.1-1f'i"AI'

"Jli\ "°«1 ~U"'P' 3'1 .,., titn?; ,.9'" Done at Addis Ababa, this 31 II day of December, 2002.

"1M OJIA~ l.foC1..it

flt...,.fokl d.1.~"ce Jl 'P'bt-lt.fce &Tof1f\.bT ~Il.&;'''''

GIRMA WOLDE GIORGISPRESIDENT OF THE FEDERAL

DEMOCRATIC REPUBLIC OF ETmOPIA