“Do not pay if a receipt is not issued”

Posted in Know How

During a sale of goods or services, a buyer and a seller enter into an agreement to transact business and complete a financial transaction. The agreement can be documented with a receipt. A receipt is documentation that payment has been made to finalize a sale or that something has been received, especially in return situations in which goods are defective. It serves as proof of ownership in most cases. A receipt can be in the form of a tax invoice, or a printed cash register or hand written receipt. The Ethiopian Revenues and Customs Authority (ERCA) is the body responsible for collecting revenue from customs duties and domestic taxes from the tax payers. The ERCA shall have the powers and duties to establish and implement modern revenue assessment and collection system; one of the methods that ERCA uses to collect the revenue is by using receipt. The tax payers have an obligation to use receipt. According to part four - of the federal tax administration Proclamation No. 983/2016, the tax payers have the following obligations:

1/ A  taxpayer  that  has the obligation to  maintain books  of account  shall  register  with  the  Authority  the  type  and quantity of receipts before having such receipts printed.

2/ Any  person operating a printing  press  engaged  by  a taxpayer  to  print  receipts  shall  ensure  that  the  type  and quantity  of  receipts  are  registered  with  the Authority before printing the receipts.

3/ Any taxpayer that has an obligation to maintain books of account shall issue a receipt for any transaction.

4/ The Authority shall issue directives for the implementation of this Article.

The proclamation also included taxpayers’ punishments when they break the tax law ofThe Ethiopian Revenues and Customs Authority. For instance, in proclamationNo. 609/2008 article--, Failure to use VAT Invoice: 1/ Any  person  who  is  registered  for  VAT  commits  an  offence  if  carries  out  transactions  without  VAT  invoice  and  shall,  upon  conviction,  be  punished  with  a  fine  of  not  less  than Birr 10,000 and not more than  Birr 100,000 and imprisonment for a  term of not less than two  years and  not more than five years. 2/ Where the tax payable on the basis of  the  amount  shown  on  the  illegal  invoice referred to in sub article (1)  of  this  Article  is  in  excess  of  the  Birr 100,000 the fine shall be equal  to the tax amount.  In addition,in ProclamationNo. 609/2008 article—50, un authorized use or print of receipt any person commits an offence if uses  unauthorized  computer  generated  or  printed  receipts  or  provides  the  service  of  printing  unauthorized  receipts  and  shall, upon conviction, be punished with  a  fine  of  not  less than  Birr  10,000  and  not  more  than  Birr  100,000  and  imprisonment for a term of not less than  two years and not more than five years.

In general, a receipt is a written acknowledgment that a specified payment has been received. A receipt records the sale of goods or provision of a service. If the recipient of the payment is required to collect a tax from the customer, the amount a tax collected would also be included on the receipt and the amount would be deemed to have been collected by ERCA or tax authority. A receipt lists goods or services, prices, taxes, total amount paid and method of payment and soon. It generally includes information about buyers and sellers, in different formats and to varying degrees. When you buy something, you should ask a receipt. Receipts will help you to prove the ownership of the goods. Specifically, the receipt would provide taxpayers with detailed information regarding their tax payments. Therefore “Do not pay if a receipt is not issued.”

Solomon Degarege


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