Tax
Domestic income tax plus a two per cent diaspora levy on citizens abroad
Domestic taxation runs on income and sales taxes under proclamations of the 1990s. Distinctively, Eritrea levies a two per cent tax on the income of citizens living abroad, tied to access to consular services and property rights.
Key rules
- Jurisdiction — National, administered by the Inland Revenue Department under the Ministry of Finance.
Governing law
- Proclamation 62/1994 on income taxas amended
- Proclamation 64/1994 on sales and excise tax
- Proclamation 67/1995 — two per cent tax on Eritreans abroad
In practice
The diaspora tax is the internationally notable feature and it is genuinely unusual: Eritrea taxes non-resident citizens at two per cent of income, and payment is in practice a condition of obtaining passports, consular documents, business licences and property transactions in Eritrea. UN Security Council Resolution 2023 (2011) criticised the collection methods used abroad, and several states have investigated or restricted collection on their territory as a matter of coercion and sovereignty. Domestic taxation comprises business profit tax, personal income tax withheld at source, and sales and excise taxes rather than a VAT. Mining agreements carry negotiated fiscal terms that are not public. Published rate schedules and administrative practice are difficult to verify from open sources, so the entry is research.