The Ministry of Revenues has issued a binding procedural manual outlining administrative penalties, interest charges, and license suspension or cancellation measures against manufacturers that fail to meet excise tax obligations.
The decision to enjoy the New Excise Tax Compliance Framework was communicated in a formal letter dated December 24, 2025, and addressed to large and medium taxpayers branch brands and regional branches in bahir dar, Adama, Mekelle, Kombolcha, Hawassa, Jimma, and Dire Dawa.
The letter, signed by Yosef Shiferaw, head of the tax awareness directorate at the Ministry, confirms that the manual was prepared to operationalize excise tax laws and strengthen enforcement against non-compliant manufacturers of excisable goods.
According to the document, manufacturers who fail to fulfill excise tax obligations may face administrative penalties, interest charges of up to 25 percent, and sanctions ranging from temporary suspension to full revocation of operating licenses.
From The Reporter Magazine
The provisions specify that failure to register for excise tax, or failure to cancel registration after ceasing operations, will result in penalties equivalent to 25 percent of the unpaid tax, or 1,000 Birr where no tax is assessed. If the calculated penalty is less than 1,000 Birr, the minimum amount will still apply.
The manual allows exemptions from penalties only when taxpayers demonstrate valid reasons, including natural or man-made disasters, serious illness, or death, occurring within 30 days after business cessation.
It also outlines consequences for late or non-payment of declared excise tax. Taxpayers who fail to declare and remit excise tax on time will be charged a five percent monthly penalty, accumulating until it reaches a maximum of 25 percent, in addition to interest.
From The Reporter Magazine
Interest on unpaid excise tax, the document states, will be calculated at a rate equal to the highest commercial bank lending rate plus an additional 15 percent, and assessed alongside the principal tax amount.
The manual further details conditions under which excise tax licenses may be suspended, including failure to maintain proper records, violation of license terms, or submission of false or misleading information to tax authorities. Continued non-compliance may lead to license cancellation, according to the document.
Excise taxpayers whose licenses are suspended may file an appeal within 14 days of receiving notification. The tax authority is required to respond to such appeals within 14 days, either lifting the suspension or specifying corrective actions to be taken within a defined timeframe.
In addition, the manual authorizes temporary closure of business premises for up to 14 days if a taxpayer fails to pay due taxes or submit required documents after receiving three written warnings.
The new enforcement framework was approved for implementation after the Ministry of Revenues’ Legal Services Directorate issued its legal opinion on November 30, 2025, affirming that the manual aligns with existing excise tax laws and does not introduce unauthorized powers or obligations.
The manual spans 13 pages and has been distributed as an annex to the directive, with instructions for manufacturing companies, relevant departments, and tax officers. The Ministry states that the manual is intended to ensure consistent application of excise tax laws and strengthen tax compliance across excisable goods manufacturers nationwide.
.
.
.
#Ministry #Issues #Binding #Manual #Enforce #Excise #Tax #Compliance
Source link
