Directive No.

23/2009 issued to implement duty free privileges for goods

and services which are designated for humanitarian aid
It has become necessary to properly implement the law that allows for the exemption of tax
on goods and services which are imported from abroad or purchased on a domestic market by
registered charity organizations who enter the country following an invitation to respond to
natural or man made disaster,

It has become essential to establish a system that keeps organizations, which purchase charity
supplies, from using their duty-free privilege for purposes other than those officially stated. It
has also become necessary to set a system which especially enables charity organizations to
get tax refund after they purchased goods with payment of tax,

As a result, the Ethiopian Revenues and Customs Authority hereby issues this directive
pursuant to the power bestowed to it by article 39 of the Value Added Tax Regulation No,
79/2002 issued by the Council of Ministers.

Short title

This directive may be cited as “Directive No, 23/2009 and is issued to implement the law that
exempts goods and services for humanitarian aid from tax.

Definition

In this directive
1/ Charity organization shall mean those organizations like the Red Cross whose program is
to provide assistance for victims of natural and man made disaster and accepted by
Ministry of Agriculture and Rural Development and who obtained a certificate of
accreditation from the Ministry of Justice.
2. "Tax" Shall mean Value Added Tax.
3. "Tax Exempted Supplies" shall mean transactions done without the payment of tax.
4. "Regulation" shall mean the Council of Ministers Value Added Tax Regulation No.
79/2002
5. "Authority" shall mean the Ethiopian Revenues and Customs Authority.

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3. Conditions under which charity organizations will be treated in relation to the tax
refund scheme

Goods purchased on the domestic market or imported from abroad by charity organizations
for humanitarian aid may be treated in accordance with the tax refund scheme provided the
following requirements are fulfilled.

A. For foreign organization, it shall present evidence to prove that it is accredited by both the
Ministry of Foreign Affairs, and Ministry of Finance and Economic Development.
B. For Ethiopian organization, it shall present evidence that indicates it is registered with the
Ministry of Justice or a pertinent regional administrative body. It should also provide a
recently renewed certificate of registration and a certificate issued by Ministry of
Agriculture and Rural Development that shows it is engaged in providing humanitarian
aid.

C. The organization is also required to provide its relief program to the Ministry of
Agriculture and Rural Development and to other relevant institutions and shall present
evidence granted to it by the Ministry indicating qualities and quantities of supplies
which are to be exempted of tax or to be charged at the zero tax rate and the duration of
the relief program.

4. Concerning projects designed directly for humanitarian aid

Transactions to support humanitarian aid programs and/or programs, for reestablishing

victims of or rescuing them from natural or man made disaster, such as digging water wells,
constructing shelter, making ditches etc, shall be treated by tax refund system, provided these
programs are approved by Ministry of Finance and Economic Development and upon
presentation of information regarding duration of each program to the Authority.

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5. Goods which cannot be subject to tax refund scheme
Goods that have no direct relationship to humanitarian aid, e.g. private automobiles, personal
effects and consumption goods for aid workers cannot be subject to tax refund scheme
.

6. Zero-rated supplies and execution of duty-free procedure

1. The tax paid on goods purchased in the domestic market by the charity organizations
shall be refunded in accordance with the laws stipulated in the tax refund directive.
2. Goods imported by charity organizations for charity purposes shall be exempted from
tax in accordance with the relevant proclamations, regulations, and directives
prescribed by the Authority.
3. This directive shall not be applied to goods imported for personal use.

7. Transitional provisions

Cases that had been undertaken before this directive has come into force shall be treated in
accordance with the previous directive.

8. Deleted directives

Traditional practices and circulars that had been in use before this directive has come into
force are replaced by this directive.

9. Effective date

This directive shall enter into force as of the 7th January 2009.