Glossary

Chart of Accounts (COA)

A complete listing of all accounts in your general ledger, organized by category (Assets, Liabilities, Equity, Revenue, Expenses). Each account has a unique code and name.

General Ledger (GL)

The master record of all financial transactions in your business. Every transaction is recorded as a journal entry with debits and credits.

Journal Entry

A record of a financial transaction showing which accounts are debited and credited. Every journal entry must balance (total debits = total credits).

Trial Balance

A report showing the balance of every account in your chart of accounts at a specific date. Used to verify that debits equal credits before preparing financial statements.

Balance Sheet

A financial statement showing your company's assets, liabilities, and equity at a specific point in time. Formula: Assets = Liabilities + Equity

Profit & Loss Statement (P&L) / Income Statement

A financial statement showing revenue, expenses, and net profit/loss over a period of time (e.g., monthly, quarterly, yearly).

Depreciation

The systematic allocation of the cost of a fixed asset over its useful life. Under Ethiopian straight-line rules, useful life (years) ≈ 100 ÷ statutory annual rate (e.g. 15% → 7 years). Gibir-Negari spreads cost evenly: monthly depreciation = purchase cost ÷ (useful life × 12).

Fixed Assets

Long-term tangible assets used in business operations (buildings, vehicles, equipment, furniture). Not intended for resale.

Accounts Receivable (AR)

Money owed to your business by customers for goods or services sold on credit.

Accounts Payable (AP)

Money your business owes to suppliers or vendors for goods or services purchased on credit.

VAT (Value Added Tax)

A 15% tax on the sale of goods and services in Ethiopia. Businesses collect VAT from customers (Output VAT) and pay VAT to suppliers (Input VAT). The difference is remitted to ERCA.

Example: You sell goods for 1,150 ETB (1,000 + 15% VAT). You collect 150 ETB VAT from the customer and remit it to ERCA.

TOT (Turnover Tax)

A 2% tax on gross sales for businesses with annual turnover below 1,000,000 ETB. Businesses pay either VAT or TOT, not both.

Example: If your monthly sales are 50,000 ETB, you pay 1,000 ETB (2%) as TOT.

WHT (Withholding Tax)

Tax withheld at source when making payments for services, rent, or imports. Rates vary: 2% for goods, 10% for services, 5% for rent, etc.

Example: You pay 10,000 ETB for consulting services. You withhold 1,000 ETB (10%) and pay the consultant 9,000 ETB.

Income Tax (Employment)

Progressive tax on employee salaries, ranging from 0% to 35% based on income brackets. Employers withhold this tax from employee salaries and remit to ERCA.

Profit Tax (Corporate Income Tax)

Tax on business profits. Rate is 30% for most businesses. Calculated annually based on net profit from the P&L statement.

Pension Contribution

Mandatory retirement savings. Employees contribute 7% of gross salary, employers contribute 11%. Total 18% is remitted to the pension agency.

TIN (Tax Identification Number)

A unique 10-digit number assigned by ERCA to identify taxpayers. Required for all tax filings and business transactions.

ERCA (Ethiopian Revenues and Customs Authority)

The government agency responsible for tax collection and customs administration in Ethiopia.

eTax Portal

ERCA's online platform for filing tax returns, viewing tax periods, and managing tax obligations. GibirNegari integrates with this portal.

TASS (Tax Administration System Software)

A system for verifying the authenticity of purchase receipts. Businesses can check if a supplier's receipt is registered with ERCA.

Receipt / Invoice

A document issued by a seller to a buyer showing the details of a sale: items, quantities, prices, VAT, and total amount.

Purchase Entry

A record of goods or services purchased by your business. Includes supplier name, items, amounts, and VAT.

Sales Entry

A record of goods or services sold by your business. Includes customer name, items, amounts, and VAT.

Vendor / Supplier

A business or individual from whom you purchase goods or services.

Customer / Client

A business or individual to whom you sell goods or services.

Fiscal Year

A 12-month period used for accounting and tax purposes. In Ethiopia, the fiscal year runs from Hamle 1 to Sene 30 (July 8 to July 7 in Gregorian calendar).

Ethiopian Calendar

Ethiopia uses its own calendar system, which is approximately 7-8 years behind the Gregorian calendar. GibirNegari supports both calendars.

Automation Run

A background process in GibirNegari that syncs with eTax portals, verifies TASS receipts, or runs AI compliance checks. Free plans have limited automation runs per month.

AI Tax Auditor

GibirNegari's AI-powered feature that analyzes your transactions for compliance issues, anomalies, and potential tax risks before you file.