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Ethiopia: Draft Bill Proposes Income Tax Exemptions for Cooperatives

MP abstains special committee membership appointment

The House of People’s Representatives (HPR) on Tuesday discussed on a draft bill which seeks to provide income tax exemptions for cooperative societies.

The draft is an amendment to the existing Cooperative Societies Proclamation No. 147/1998 and its amendment proclamation of 402/2004.

Under the section ‘Government assistance’ the draft bill entitles, among other incentives and supports, any cooperative society to be exempted from income tax.

However, members will be required to pay tax on their dividends from participation and on share.

The draft bill also entitles cooperatives to obtain land from to conduct their activities or services.

The proposed bill provides that any primary cooperative society, established by persons who live or work within a given area as opposed to federal cooperatives, shall be established with in an initial capital that covers at least one year operation cost based on its plan and feasibility study.

Any cooperative societies union shall be established with an initial capital of at least 25 percent raised from members societies through special resolutions to implement plan developed for the federation based on feasibility study.

According to the proposed provision that stipulates asset and fund of cooperatives, any cooperative society shall deduct 30 percent of the profit and allocate for any reserve.

Currently, there are over 67,000 cooperative societies and 330 unions with a combined 12 million membership.

The draft bill is forwarded to Agriculture and Natural Resources Standing Committee for further scrutiny.

In a related news, the house on Monday approved the appointment of members to a newly established committee – the National Intelligence and Information Special Committee. The committee is entrusted with the task of overseeing the activities of the intelligence and security apparatus such as National Intelligence and Security Services, Information Network Security Agency and the Ministry of Defense.

The membership appointment was approved with a majority vote with a rare abstinence in the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) and affiliates controlled legislative body from one Member of Parliament, Adhane Haile (PhD), former deputy minister of Education and TPLF member.

The inclusion of an MP who is already a member of another standing committee (Law and Justice Administration Standing Committee) and two others with a title of government whip and a state minister portfolio was a contentious issue. Traditionally, MPs in the executive branch are not usually elected to become members of standing committees.

The Reporter (Addis Ababa)

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