PROCLAMATION NO. 110/1998
A PROCLAMATION TO PROVIDE FOR THE
PAYMENT OF STAMP DUTY
WHEREAS, it has become necessary to amend the stamp duty levied on documents in a manner which would contribute to the development of art, the activities of financial institutions and the transfer of capital assets;
NOW, THEREFORE, in accordance with Article 55(1) and (11) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follow:
1. Short Title
This Proclamation may be cited as the “Stamp Duty Proclamation No. 110/1998”
In this Proclamation
1. “Award” means a decision in writing rendered by an arbitrator(s) on a reference made otherwise than by order of court in the course of suit by parties to a compromise, conciliation or arbitral submission or other similar matters;
2. “Bond” includes any instrument, whereby a person obliges himself to pay money to another, on condition that the obligation shall be void, if a specific act is performed or is not performed, as the case may be; or any instrument attested to by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another;
3. “Collective Agreement” means an agreement relating to conditions of work, concluded in writing between one or more representatives of trade unions and one or more employers or agents or representatives of employers organizations;
4.”Contract of Employment” means an agreement formed where a person agrees, directly or indirectly, to perform, work for a definite or indefinite period or, piece work in return for remuneration;
5. Instrument” means a written document by which any right or obligation is or purports to be created, recorded, transferred, extinguished or by which its scope is limited or extended;
6. “Minister” means the Minister of Finance;
7. “Notarial Act” means an act of attestation and certification performed by person(s) authorized to perform such acts;
8. “Person” means any natural person or any organization irrespective of having juridical personality;
9. “to Execute Instrument” means to draw, issue, to carry into effect or to negotiate an instrument;
10. “Security Deed” means any instrument whereby a borrower or guarantor gives to a lender a charge upon a part or the whole of his property;
11. “Articles of Association” include memorandum of association;
3. Instruments Chargeable with Stamp Duty
The Following instruments shall be chargeable with stamp duty:
1. memorandum and articles of association of any business organization, cooperative or any other form of association;
4. warehouse bond;
5. contract and agreements and memoranda thereof;
6. security deeds;
7. collective agreement;
8. contract of employment;
9. lease, including sub-lease and transfer of similar rights;
10. notarial acts;
11. power of attorney;
12. documents of title to property.
4. Rates of Stamp Duty
1. The applicable rates of stamp duty for each instrument mentioned under Article 3 shall be those specified in the Schedule attached hereto and constituting an integral part hereof.
2. The rate payable at any subsequent execution of an instrument shall be as specified in the same schedule.
5. Mode of Valuation
1) Where the value of the right or obligation executed by means of an instrument can be determined, the rate chargeable on such instrument shall be the percentage of such value as specified in the schedule.
2) Where the value of the right or obligation executed by means of an instrument cannot be determined, the amount chargeable on such an instrument is the fixed amount specified for each such instrument in the schedule.
3) Where an instrument is chargeable with stamp duty in respect of any amount expressed in any currency, other than Birr, such amount shall be computed on the basis of the prevailing rate of exchange.
4) Where an instrument is chargeable with stamp duty on an ad-valorem basis in respect of any stock or of any marketable security, such amount shall be computed on the average value of the stock or security prevailing at the time when the instrument is made.
5) Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of duties payable in respect of each separate instrument.
6.a) The stamp duty payable on documents transferring title shall be calculated on the value of the property involved as agreed upon between the transfer and the transferee, provided however that such valuation is approved by the Federal Inland Revenue Authority;
b) Where the value agreed between the transfer and the transferee is not acceptable to the Federal Inland Revenue Authority, the value of the property involved in the transfer of title shall, for the purpose of calculating the stamp duty, be determined by a special committee which shall be appointed for such purposes by the Federal Government Revenue Board.
1. Unless otherwise provided herein the beneficiary of an instrument shall be liable to pay the stamp duty thereon.
2. The person making (drawing) or issuing an instrument in Ethiopia shall, upon its exectuion, be liable for the payment of stamp duty provided, however, that when an instrument is made (drawn) or issued outside Ethiopia the person who is first executing it in Ethiopia shall be liable for the payment of stamp duty.
3. Unless otherwise specified in the lease agreement the stamp duty in respect of the lease agreement shall be paid by the lessee.
4. The borrower shall be liable for the payment of stamp duty chargeable on security deeds.
5. The transferee shall, unless otherwise agreed, be liable for the payment of stamp duty chargeable on documents transferring title to property.
6. Parties to a contract or to an agreement are jointly and severally liable for the payment of stamp duty thereon.
7. The employer shall be liable for the payment of stamp duty on contracts of employment.
8. Parties to an award are jointly and severally liable for the payment of stamp duty thereon.
9. The employer and employees are jointly and severally liable for the payment of stamp duty on collective agreement.
7. Time and manner of Payment
1. The stamp duty shall be paid:
a) on memorandum and articles of association, before or at the time of registration;
b) on awards, before or at the time of issuance of the award;
c) on contracts or agreements, before or at the time of signature;
d) on leases or sub-leases, before or at the time of signature;
e) on notarial acts, at the time of issuance;
f) on security deeds, before or at the time of signature;
g) on documents of title to property, before or at the time issuance is effected.
2. a) The payment of a stamp duty under Birr fifty(50) shall be effected by affixing stamp of appropriate value to the instrument.
b) When the stamp duty exceeds Birr fifty(50) or where the type and nature of instrument so requires, the Federal Government Revenues Board may by directive provide that stamp duty be paid by means other than affixing stamp.
3.a) Whoever executes or receives an instrument bearing an adhesive stamp shall at the time of execution cancel the same, so that it cannot be used again.
b) Persons required to cancel the adhesive stamp shall cancel it in such manner as will be prescribed by the Federal Inland Revenue Authority.
c) Any instrument bearing an adhesive stamp which has not been canceled as prescribed by the Federal Inland Revenue Authority shall be deemed, so far as such stamp is concerned, to be unstamped. The responsibility arising from the non cancellation of the stamp shall be on the person executing or receving the instrument bearing an adhesive stamp and not on the person submitting the document for execution.
8. Power of the Federal Inland Revenue Authority
The Federal Inland Revenue authority is hereby vested with powers to:
1. collect the stamp duty determined under, and implement the provisions of this Proclamation;
2. require persons liable to pay stamp duty to submit for its inspection any registers and books, papers, documents and proceedings necessary for the determination of stamp duty, or where necessary to require the attendance of such persons who shall give the necessary explanation in the course of its inspection of such records;
3. to determine by estimation and collect the stamp duty payable under this Proclamation if the concerned person fails to comply with its requests provided in sub-article 2 of this Article.
9. Right to Appeal
Persons dissatisfied with the decision of the Federal Inland Revenue Authority in respect of the amount of stamp Duty may, within 21 days from the date of notification of the decision rendered in writing, make an appeal against the decision to the Federal High Court.
10. Effect of nonpayment of Stamp Duty
1. No instrument chargeable with stamp duty shall be admitted in evidence for any purpose by any person having, by law or consent of parties, authority to receive evidence or shall be noted upon or authenticated by any such person or public office, unless such instrument is duly stamped.
2. Sub-article 1 of this Article shall not affect the validity of the instrument when submitted as evidence in any proceedings in a criminal court.
3. Any instrument inadmissible in evidence in accordance with this Proclamation shall be admitted in evidence on payment of two times the amount due which shall not be less than 10 Birr.
4. The application of any penalty pursuant to the foregoing Articles shall not bar the prosecution of any person in accordance with Article 12 of this Proclamation.
1. The Minister may for good cause grant exemption from payment of stamp duty.
2. Public bodies on which the Federal Government of Ethiopia Financial Administration Proclamation No. 57/1996 applies shall be exempt from payment of stamp duties.
3. Goods imported for sale by traders having import license shall be exempt from payment of stamp duty when first registered in the name of the trader.
4. Documents may be exempted from the payment of stamp duty in accordance with international agreements and conventions approved by the Government.
5. Subject to reciprocity, the Minister may grant embassies, consulates and missions of foreign states exemption from payment of stamp duty.
6. Share Certificates shall be exempt from stamp duty payable on the register of title of property.
1. Any person:
a) executing or signing, otherwise than as a witness, a document chargeable with stamp duty without the same being stamped;
b) who, with intent to defraud the appropriate payment of duty, conceals facts bearning on the true nature of any instrument;
shall be liable on conviction to a fine not less than Birr 25,000 and not exceeding Birr 35,000 and to rigorous imprisonment for a term not less than 10 years and not more than 15 years.
2. Any person:
a) appointed to sell stamps or stamped papers, who disobeys Regulations issued under this Proclamation; or
b) not so appointed, sells or offers for sell stamps or stamped papers;
shall be liable on conviction to a fine not less than Birr 5,000 and not exceeding Birr 20,000 and to rigorous imprisonment for a term not less than five years and not more than 10 years
13. Repeal and Savings
1. The stamp Duty proclamation No. 334/1987 is hereby repealed and replaced by this proclamation.
2. The provisions of the Stamp Duty Regulations No. 221/1959 shall remain in force insofar as they are not in consistent with this Proclamation.
The Federal Government Revenues Board may issue directives for the proper implementation of this proclamation.
15. Effective Date
This Proclamation shall enter into force as of the 12th day of May, 1998.
Done at Addis Ababa, this 12th day of May, 1998.
PRESIDENT OF THE FEDERAL DEMOCRATIC
REPUBLIC OF ETHIOPIA