- A Proclamation to Provide for the Payment of Stamp Duty
- ARTICLE 1 SHORT TITLE
This Proclamation may be cited as the “Stamp Duty Proclamation No. 180/2017”.
- ARTICLE 2 DEFINITIONS
In this Proclamation, unless the context otherwise requires:
1. “Award” means a decision in writing rendered by an arbitrator or arbitrators on a reference made otherwise than by order of court in the course of suit by parties to an arbitral submission;
2. “Bond” includes any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void where a specific act is performed or is not performed, as the case may be, or any instrument attested by a witness and not payable to order or bearer;
3. “Collective Agreement and contract of Employment” shall have the respective meanings given to them by Articles 3 (8) and (21) of the Labour Proclamation of Eritrea No. 118/2001;
4. “Contract” means an agreement whereby two or more persons as between themselves create, vary, or extinguish obligations of proprietary nature;
5. “Contract of Insurance” means an Insurance policy by which one person, the Insurer, in consideration of a premium, engages to indemnify another, the insured against loss, damages, loss of expected profit, or any liability arising from an unknown or contingent event, including a life policy and any policy insuring any person against accident or sickness or any other personal insurance;
6. “Inland Revenue Department” means the body designated by the Minister to implement, inter alia, the provisions of this Proclamation and of regulations issued hereunder;
7. “Instrument” means a written document by which any right or obligation is created, recorded, transferred, extinguished or by which its scope is limited or extended;
8. “Minister and Ministry” means the Minister and Ministry of Finance, respectively;
9. “Negotiable Instrument” means any document incorporating a right to an entitlement in such manner that it would not be possible to enforce or transfer the right separately from the instrument and includes such commercial, instruments as bills of exchange, promissory notes, cheques and other similar documents;
10. “Notarial act” means an act of attestation and certification performed by a person authorized to perform such act;
11. “Person” means any natural person, or any organization irrespective whether such organization possesses a legal personality or not;
12. “Receipt” means any note or writing whereby any money or any signed bill of exchange, cheque or promissory note is acknowledged in writing to have been received, or whereby any other claim or part thereof is acknowledged to have been received or satisfied, or which signifies or imports any such acknowledgment;
13. “Security deed” means any instrument whereby a borrower or guarantor gives to a lender a charge upon a part or the whole of his property; and
14. “Ticket” means a certificate or token evidencing payment of admission fee to places of entertainment.
- ARTICLE 3 REPEAL
The Stamp Duty Proclamation No. 65/1995 is hereby repealed and replaced by this Proclamation.
- ARTICLE 4 SCHEDULES OF INSTRUMENTS CHARGEABLE WITH STAMP DUTY RATES
The stamp duty on each instrument shall be charged, levied and collected at the following rates:
- ARTICLE 5 RATES OF STAMP DUTY
1.The Minister may issue regulations to provide for the payment of stamp duty rates on specific models and different certificates.
2.The rate payable at any subsequent execution shall be those specified in the same schedule.
3.Endorsement or dishonoring any form of negotiable instrument or introducing any amendment, alteration or any other change in any other instrument shall be considered as subsequent execution.
- ARTICLE 6 MODE OF VALUATION
1. Where the value of the right or obligation executed by means of an instrument can be determined, the rate chargeable on such instrument shall be the percentage of value specified for each such instrument in the schedule above, where the value of the right or obligation executed by means of an instrument cannot be determined, the amount chargeable on such an instrument is the fixed amount specified for each such instrument in the schedule.
2. Where an instrument is chargeable with stamp duty in respect of any amount expressed in any currency other than Nakfa, such amount shall be computed on the basis of the prevailing rate of exchange.
3. Where an instrument is chargeable with stamp duty on an ad valorem basis in respect of any stock or of any marketable security, such amount shall be computed on the average value of the stock or security prevailing at the time when the distinct instrument is drawn.
4. Any instrument comprising two or more different or related matters shall be chargeable with the aggregate amount of duties payable in respect of each separate instrument.
5. The stamp duty payable on documents transferring title shall be calculated on the value of the property involved as agreed upon between the transferor and transferee, provided however that such valuation is approved by the Inland Revenue Department.
6. Where the value agreed between the transferor and the transferee is not acceptable to the Inland Revenue Department, the value of the property involved in the transfer of title shall, for the purpose of calculating the stamp duty, be determined by a special committee comprising concerned governmental agencies appointed or designated by the Minister.
7. The Minister may approve or reject the stamp duty determined to be paid by the special committee.
- ARTICLE 7 OBLIGATION TO PAY
1. Unless otherwise provided herein the beneficiary of any instrument shall be liable to pay the stamp duty thereon.
2. The person drawing or issuing an instrument in Eritrea shall be liable for the payment of stamp duty, provided, however, that when an instrument is drawn outside Eritrea the person executing it first in Eritrea shall be liable for the payment of stamp duty.
3. Unless otherwise specified in a lease agreement the stamp duty payable thereon shall be paid by the lessee.
4. The insured shall pay the stamp duty chargeable on a contract of insurance.
5. The borrower shall be liable for the payment of stamp duty chargeable on security deeds.
6. The transferee shall, unless otherwise agreed, be liable for the payment of stamp duty chargeable on documents transferring title to property and transfer of shares.
7. Parties to a contract or to an agreement are jointly and severally liable for the payment of stamp duty thereon.
8. The liability to pay stamp duty on petitions and applications to government bodies rests on the petitioner or applicant.
9. The employer shall be liable for the payment of stamp duty on a contract of employment.
- ARTICLE 8 MANNER AND TIME OF PAYMENT
1. Stamp duty shall be paid as follows:
a) on memorandum and articles of association, before or at the time of registration;
b) on awards, before execution or at the time of their issuance ;
c) on negotiable instruments, at the time of issuance;
d) on contracts or agreements, before or at the time of signing;
e) on leases, before or at the time of signing;
f) on notarial acts, at the time of issuance;
g) on security deeds, before or at the time of issuance;
h) on contract of Insurance, before or at the time of issuance of the insurance policy;
i) on receipts, at the time of issuance;
j) on share certificate, at the time of issuance;
k) on documents transferring title of property and on transfer of shares, before or at the time the transfer is effected;
l) on tickets, before or at the time of issuance; andm) on model, when purchased, and on clearance certificate at the time of issuance.
2. When the amount of stamp duty:
a) is under Nakfa fifty (50) it shall be effected by affixing stamp of appropriate value on the instrument; and
b) is Nakfa fifty (50) or more than Nakfa fifty or where the type and nature of instrument so requires, the Minister may by regulation provide that stamp duty shall be paid against receipt.
3. Whoever executes an instrument bearing an adhesive stamp shall, at the time of execution, cancel the same, so that it cannot be used again.
- ARTICLE 9 POWERS OF THE INLAND REVENUE DEPARTMENT
Inland Revenue Department is hereby vested with powers to:
1. collect the stamp duty determined under, and implement the provisions of this Proclamation;
2. require persons liable to pay stamp duty to submit for inspection any register, book, papers, document and proceedings necessary for the determination of stamp duty, or where necessary, to require the attendance of such persons who shall give the necessary explanation in the course of inspection of such records; and
3. determine the stamp duty payable under this Proclamation by estimation where the concerned person fails to comply with the required documentation enumerated in sub article (2) of this Article.
- ARTICLE 10 RIGHT TO APPEAL
1. Any persons dissatisfied with the decision of the Minister regarding the amount of stamp duty payable may, within 30 days from the date of notification of the decision rendered in writing, appeal against the decision of the Minister to the High Court.
2. The decision of the High Court shall be subject to no further appeal.
- ARTICLE 11 EXEMPTIONS
1. No stamp duty shall be charged on a contract, agreement or memorandum thereof relating exclusively to the sale of merchandise.
2. The Minister may, for good cause, grant exemption from payment of stamp duty on tickets.
3. No stamp duty shall be charged on a petition or application made by an employee to his employer in matters relating exclusively to his employment such as salaries, promotions, leave, etc.
4. Ministries, Commissions, Government Authorities and other State Agencies and Offices including the Bank of Eritrea shall be exempt from payment of stamp duties.
5. The Minister may subject to reciprocity grant exemptions from payment of stamp duty on all or certain instruments of Embassies, Consulates and Missions of foreign states or international organizations.
- ARTICLE 12 POWERS OF THE MINISTER
The Minister is hereby empowered to issue regulations for:
1. the supply or sale of stamps and stamped papers;
2. the appointment of persons by whom the sale of stamps and stamped papers is to be carried out, and the duties and remuneration of such persons; and
3. the better carrying out of this Proclamation.
- ARTICLE 13 PENALTY
1. Whosoever being appointed to sell stamps or stamped papers sells the same at a value exceeding rates set forth by this Proclamation shall, in addition to being deprived of the permit, be punishable in accordance with the provisions of the Penal Code of Eritrea.
2. Whosoever commits a crime relating to stamp duty shall be punishable according to the relevant provisions of the Penal Code of Eritrea.
3. Whosoever fails to pay stamp duty pursuant to Article 8 of this Proclamation shall be liable to pay penalty amounting to 10% of the payable value of the stamp duty.
4. A petition or application which has not been duly stamped shall be rejected.
5. No penalty or fine shall be imposed in respect of a petition or application that has not been duly stamped.
- ARTICLE 14 EFFECTIVE DATE
This Proclamation shall enter into force as of the date of its publication in the Gazette of Eritrean Laws.
Asmara, March 13 2017 Government of Eritrea.