Sales tax in Eritrea: how it works and who must register

The rate

There is no single national rate in Eritrea. The rate depends on the place of sale and the type of product, and can combine national, regional and local components. Check the rate for your location before you quote a price.

There is no single rate: 5% and 10% apply to scheduled goods and 12% is the residual rate for everything else. This is a cascading sales tax with no input credit, so it does not work like VAT and cannot be reclaimed on purchases. Eritrea publishes no tax-authority website; confirm before relying on any figure.

Who must register

Registration becomes compulsory once taxable turnover passes the threshold Inland Revenue Department sets, measured over a rolling period. Below it, registration is usually voluntary, which makes sense if your customers are registered businesses that can reclaim what you charge.

How to register

Register with Inland Revenue Department using your TIN. Once registered you receive a Sales tax registration number or certificate, and from that date you must charge Sales tax on taxable sales, issue compliant invoices and file returns even when nothing is due.

Charging Sales tax on an invoice

Show the net amount, the Sales tax rate, the Sales tax amount and the gross total, with your registration number in the header. Prices quoted to consumers should include Sales tax; prices quoted to businesses usually exclude it and say so. The Eritrea calculator adds or removes Sales tax and shows the arithmetic.

Filing and paying

Returns are periodic, most often monthly or quarterly, and report the Sales tax you charged less the Sales tax you paid on purchases. The difference is paid to Inland Revenue Department by the return deadline; a repayment is claimed when purchases exceed sales.

Penalties for getting it wrong

Late registration, late returns and late payment each attract penalties and interest with Inland Revenue Department. Charging Sales tax while unregistered is an offence in most countries. If you missed the threshold, register now and declare the back period.