The Ministry of Finance Issues a Clarification Regarding Duty and Tax Exemption of Taxis

Following the Ethiopian government’s Directive No. 70/2013 to modernize the transport sector and replace Lada taxis with newer model vehicles, the Ministry of Finance announced a duty and tax exemption for cars assembled locally, in part or in full, for this purpose.

This action, as per the Ministry, is taken in order to save the owners of Ladas from the high fuel and spare parts costs due to the aging of the vehicles, to enable them to be more competitive in the market, reduce environmental pollution, and improve the Addis Ababa’s image.  

A clarification of the procedure was deemed necessary as some have failed to grasp the guidelines issued regarding the presentation and approval of the exemption requests.

The first point is that only locally assembled (in part or whole) vehicles are eligible for the scheme, and only when the focus on new taxi associations is determined by the Ministry of Transport and Logistics’ national transport policy and strategy.

Further, according to the directive, requests for these particular duty and tax-free vehicles can only be submitted in the following way, namely:

• A letter of support from taxi associations in state governments, city administrations and federal and state offices asking to buy vehicles free of duty and tax is sent to the Ministry of Transport and Logistics
• The Ministry of Transport and Logistics sends the taxi association’s tax payer ID, business registration certificate, vehicle’s license and other necessary information to the Ministry of Finance
• MoF will then send the request to the Customs Commission after examining the relevance and evidence of the appeal.

The Ministry of Finance urges the public to protect themselves from those who claim that they have or will allow duty and tax exemptions outside of the mentioned legal procedure.

Source: The Ministry of Finance