The Investment Agency of Ethiopia is in the process of preparing an amendment to the current investment proclamation to bring it line with investment targets.
The amended bill is expected to offer tax holidays and duty exemptions on the basis of the location of investment with longer exemptions offered the further the investment is from the center, Addis Ababa.
Under this bill, therefore, the longest tax holidays and exemptions, extending to as long as ten years, would be enjoyed by investors in regions such as Afar, Somali and Gambella with currently slow economic activity.
The new system aims to balance the economic development of the various regions of the country according to the preamble to the amended bill.In the manufacturing sector, investors engaged in the construction of the industrial zones receive the highest exemption rates followed by those engaging in the textile and leather sectors will receive more incentives according to the modified bill.
Investment in the agricultural sector is offered the shortest tax break with investors getting as short as a year of tax exemption depending on what they produce.
The experts in charge of drafting the bill from the investment agency and other ministries have been conducting meetings with those engaged in the manufacturing and agricultural sectors to review the final draft of the bill.
Such consultative meetings have witnessed discontent from operators engaged in the agricultural sector who claimed that the bill favored industrial investment to the neglect of the agriculture sector.
Source: Addis Fortune
