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[Nov 2017] Business Profit Tax in Ethiopia Latest Ethiopian News AddisBiz.com | Ethiopian Business Directory & Portal - Addis Biz

Average Daily Income and Annual Tax Calculation with Examples (አማካይ የቀን ገቢ ግምት እና አመታዊ ግብር መጠን በምሳሌ)

Here are some examples of the average daily income estimation with annual tax calculation. (አማካይ የቀን ገቢ ግምት እና አመታዊ ግብር በምሳሌ)

Example 1 - Business Type : Tailor (ልብስ ስፌት)

Daily income estimate :  1,200 birr

Annual Income = 1,200 birr x 300 days

Annual Income = 360,000 birr

Estimated Profit for this business sector = 10% (For 350,000 birr - 375,000 birr)

Annual Profit = 375,000 birr x 10%

Annual Profit = 37,500

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Taxation Procedures in Ethiopia

According to the Ethiopian Income Tax Proclamation No. 286/2002, "Business" or 'Trade" shall mean any industrial, commercial professional or vocational activity or any other activity recognized as trade by the Commercial Code of Ethiopia and carried out by any person for profit.

Types of taxes and their conditions

The different types of taxes, their meaning, rates and conditions, as provided by the Federal Inland Revenue Authority (FIRA), are presented below.

1. Value Added Tax

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