COUNCIL OF MINISTERS REGULATIONS No. 75/2001
COUNCIL OF MINISTERS REGULATIONS TO
PROVIDE FOR THE APPLICATION OF
TAX WITHHOLDING SCHEME
These Regulations are issued by the Council of Ministers pursuant to Article 5 of the Definition of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. 4/1995 and Article 40(c) of the Income Tax (Amendment) Proclamation No. 227/2001.
1. Short Title
These Regulations may be cited as the “Tax Withholding Scheme Application Council of Ministers Regulations No. 75/2001.”
2. Tax Payers to Which the Withholding Scheme is Applied.
Category “A” taxpayers, organizations having juridical personality, government agencies, private non profit institutions, and non-governmental organizations shall, pursuant to Article 40 (c) of the Proclamation, withhold income tax of 5% from payments they make to tax payers providing the following services and goods:
1) Consultancy service;
2) Designs, written materials, lectures and dissemination of information;
3) Lawyers, accountants, auditors, and other services of similar nature;
4) Sales persons, service fee collectors, arts and sports professionals, entertainers, any broker including insurance brokers and other commission agents;
5) Advertisements and entertainment programs for television and radio broadcasts;
6) Construction services;
7) Advertisement services;
8) Patents for scientific and intellectual works;
9) Rent or lease of equipments including computers, buildings and other goods;
10) Maintenance services;
11) Supply of goods involving more than Birr 10,000 in any one transaction.
3. Obligations of Withholding Agents
Any person or organization who, by law, is required to withhold tax from persons and organizations supplying the services and goods listed under Article 2 above shall have the following obligations:
1) issue serially numbered official receipt to persons and organizations from whom tax is withheld;
2) fill in a form to be supplied by the revenue authority the name, tax payer identification number (if such TIN is supplied) of a person, or organization to whom payment is made, and the total amount of money paid and tax withheld;
3) person and organization withholding the tax shall transfer to the revenue authority the amount withheld within the month, together with the form indicated under sub-Artilce (2) above.
4. Obligations of the Federal Inland Revenue Authority
The Federal Inland Authority shall:
1) Prepare and distribute the form mentioned under Article 3(2) above.
2) On the basis of information received from regional tax authorities, increase the list of services and goods from which tax shall be withheld.
5. Effective Date
These Regulations shall come into force as of the 8th day of July 2001.
Done at Addis Ababa, this 29th day of the June, 2001.
PRIME MINISTER OF THE FEDERAL
DEMOCRATIC REPUBLIC OF ETHIOPIA