The Ethiopian Ministry of Finance has announced the implementation of a tax reform that will encourage industries and importers engaged in electric vehicle investment intended to benefit the society at large.

As a result, it has been announced that imported and domestically produced electric public transport vehicles, domestic automobiles and cargo vehicles will be subject to lower customs tariffs and will be exempted from value added tax, excise tax and surtax.

The purpose of the tax reform, according to the Ministry’s website, is to make the rapidly growing number of vehicles in our country compatible with environmental safety in a policy framework, to implement a transportation system that does not harm the public’s health, does not affect the climate and biodiversity, and uses renewable energy sources properly, and to make electric vehicles available to the public at affordable prices.

According to the tax reform, electric household automobiles that are imported and assembled in the country will be completely exempt from customs duty while partially assembled (locally) ones will only face a 5% duty. If fully equipped electric automobiles are imported into the country, 15% customs duty will be imposed on them. However, all three types are completely exempt from excise tax, value added tax and surtax.

Source: The Ministry of Finance


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