Addis Ababa, Ethio Negari, January 25,2023
Ehiopia Proposes Changes to Excise Tax: Relief for Some, New Taxes for Others
A new amendment to the Excise Tax Proclamation was presented to Parliament, with the aim of simplifying the tax system and reducing the burden on certain sectors of the economy.
One of the most notable changes in the amendment is the new classification system for vehicles. Under the current system, new vehicles below 1300 cc are subject to a 5 percent excise tax, but the new draft decree introduces a new category of “below 1500 cc” with a 10 percent excise tax.
Similarly, new vehicles exceeding 1500 cc but not exceeding 3000 cc are currently subject to a 60 percent excise tax, but the draft decree includes a new category of “from 1501 to 2500 cc” with a 20 percent excise tax.
In addition to these changes, the draft decree also proposes a reduction in the excise tax rate for vehicles above 3000 cc from 100 percent to 60 percent.
Furthermore, television and video cameras are proposed to be completely exempt from excise tax under the new amendment, compared to the current 10 percent tax rate.
However, the amendment also includes some new taxes, such as a 5 percent tax on telecommunications services, which were previously exempt. Additionally, non-governmental organizations, investors, persons with disabilities and institutions listed in the second category of the customs tariff will now be subject to excise tax.
