Overview
VAT was introduced in Ethiopia in January 2003, replacing the Sales Tax initially governed by the Sales and Excise Tax Proclamation No. 68/193 and its subsequent amendments.
Presently, VAT in Ethiopia is administered by the Value Added Tax Proclamation No. 285/2002 and its subsequent amendments read together with the VAT Regulations No. 79/2002. VAT is collected by the Ethiopian Ministry of Revenues, which is in charge of the administration of customs and domestic taxes.
Release date: May 2023
Scope of VAT and rates applicable |
Goods and services, where services have been defined as work done for others which does not result in the transfer of goods, are collectively termed as supplies. Transactions are either taxable or exempt. The major difference between taxable supplies and exempt supplies is that, where the supplies are taxable, the registered person is obliged to charge VAT but is also eligible to recover VAT incurred on such supplies as input tax. Whereas VAT incurred on making exempt supplies is not recoverable as input tax. VAT in Ethiopia is chargeable on:
There are two VAT rates applicable in Ethiopia:
Certain goods are exempt. |
Registration threshold |
| A person who, at the end or beginning of any period of 12 calendar months, makes or expects to make taxable transactions whose total value exceeds Ethiopian birr (ETB) 1,000,000 (approximately USD19,623) is liable for VAT registration. |
