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Influential shareholders in the Ethiopian banking sector are individuals, companies, or institutions that hold directly or indirectly two percent or more of the total subscribed capital of a bank. They play a key role in the growth and development of the banking sector by providing capital, expertise, and strategic guidance. The National Bank of Ethiopia (NBE) regulates...
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The National Bank of Ethiopia (NBE) is reducing the amount of foreign currency earnings surrendered by exporters to the NBE from 70% to 50% and to commercial banks from 20% to 1%. The new amendment allows exporters to retain 40% of their foreign currency earnings for themselves. The Retention and Utilization of Export Earnings and...
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Capital gains refer to the profits earned from the sale of business assets such as stocks, bonds, or immovable properties. Capital gains taxation is the process of taxing these gains at different rates depending on the type of asset. “Business asset” is defined to mean any asset held or used in the conduct of a...
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The Federal Supreme Court of Ethiopia has ruled that using retained earnings to pay up subscribed capital is not considered reinvestment, but rather debt offsetting. This means that dividends used to pay subscribed capital will be subjected to a 10% tax. The Ministry of Revenue’s ability to retroactively impose taxes on shareholders’ reinvested dividends is...
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A security right in a movable property is established through a security agreement. The security agreement must be in writing and signed by the grantor and the secured creditor. The security agreement must also identify the secured obligation and provide a reasonable description of the collateral. There are three ways for a security right in...
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Understanding the Legal Requirements for Electronic Signatures in Ethiopia PDF Version Available Here In December 2018, Ethiopia adopted the Electronic Signature Proclamation No.1072/2018 in order to create a conducive legal framework to promote electronic commerce and electronic government service. The Proclamation provides legal recognition to electronic signatures to promote trust in electronic communication and to...
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Reciprocity is an agreement between countries for the endowment of rights and the imposition of obligations on each other’s nationals. Generally, it is expressed by the following statement: “To the extent I did for you, you will do for me, and to the extent you did for me, I will do for you”. The principle...
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House Sales in Addis Ababa to Be Taxed at Predetermined Prices The Addis Ababa City Government has set a fixed price per square meter for house sales in an effort to collect all revenue generated by the city, in line with recent tax reforms. Under the new valuation, the government will estimate that a house...
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Ethiopian Federal Appellate Courts Must Now Provide Reasons for Dismissing Appeals The federal appellate courts have long had a practice of dismissing appeals without providing a reason on the standard form. This procedure has allowed appellate courts to make prompt decisions as they were not required to articulate detailed reasoning for deciding to dismiss an appeal...
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Ethiopian Government Support for Disaster-Affected Investors Comes to an End: Directive 967/2023 Repeals Directive 253/2021 The Directive that provides for the Government’s support to investors whose properties were damaged by both man-made and natural disasters is repealed by the Ministry of Finance’s Directive 967/2023. Consequently, Directive No.253/2021 is repealed as of the 29th of May...
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