Best answer: What is TOT tax in Ethiopia?

How is turnover tax calculated in Ethiopia?

The Turnover Tax shall be: 1) 2% (two percent) on Goods sold locally 2) for Services rendered locally; (a) 2% (two percent) on Contractors, grain mills, tractors and combine-harvesters; (b) 10% (ten percent) on others.

How do I pay my TOT tax?

TOT will be filed and paid on a monthly basis. The due date is on or before 20th of the following month. Under the returns menu, select file return, then turnover tax and download the excel return. After filing the return, go to payment menu, select ‘payment‘, select the amount payable, and generate a payment slip.

Who is eligible for turnover tax in Ethiopia?

Ethiopian government Proclamation No. 308/2002, TOT is applicable to any resident person whose turnover from business does not exceeds 500,000 during any year of income. Turnover tax is imposed on the supply of taxable goods and services by persons not registered for VAT.

How is payroll tax calculated in Ethiopia?

Here are the formulas on how to calculate personal (employee) income tax, pension, gross and net income in Ethiopia.

  1. Salary Income Tax = (Gross Salary * Tax Rate) – Deduction.
  2. Employee Pension – Gross Salary x 7%
  3. Net Income = Gross Salary – Salary Income Tax – Employee Pension – Other Taxes (If applicable)
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What is the depreciation rate in Ethiopia?

Ethiopia average depreciation rate of the capital stock was at level of 0.05 % in 2019, unchanged from the previous year.

Who is eligible for tot?

Turnover Tax (TOT) is a tax charged on gross sales of a business as per Sec. 12 (c) of the Income Tax Act. The tax is payable by resident persons whose gross turnover is more than Ksh 1,000,000 but less than Ksh 50,000,000 in any given year.

What is difference between VAT and tot?

VAT overview. Sales tax is collected by the retailer when the final sale in the supply chain is reached. In other words, end consumers pay sales tax when they purchase goods or services. … VAT, on the other hand, is collected by all sellers in each stage of the supply chain.

What is the difference between an excise tax and a sales tax?

Sales tax applies to almost anything you purchase while excise tax only applies to specific goods and services. Sales tax is typically applied as a percentage of the sales price while excise tax is usually applied at a per unit rate. … Note: Excise taxes are often subject to sales tax, so you can pay tax on tax.

What are the three major types of taxes?

Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive. Two of these systems impact high- and low-income earners differently. Regressive taxes have a greater impact on lower-income individuals than the wealthy.

How is turnover tax calculated?

Turnover Tax is calculated at a flat rate of 4%: Therefore, the tax payable will be calculated by applying 4% on the total turnover. Prior to this change turnover tax was computed using the graduated tax bands.

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What is turnover tax in Ethiopia PDF?

Turnover tax is charged under the Turnover Tax Proclamation at a rate of 2% on the supply of goods and services relating to contractors, grain mills, tractors and combine harvesters and at a rate of 10% on other services. Turnover tax is payable on goods and services supplied by persons who are not registered for VAT.