Excise tax in Ethiopia is imposed and payable on selected goods and services which are demand inelastic. This page outlines the major issues covered under the new Excise Tax Proclamation No. 1186/2020.
| Excise Tax Proclamation No. 1186/2020 | DOWNLOAD |
Rate of Excise Tax
The excise tax is paid on goods and services based on rates mentioned under the schedules of the excise Proclamation (the rate for some products can be found below)
- when imported
- when manufactured/provided locally at the rate prescribed in the schedule.
Base of Computation of Excise Tax
- Goods manufactured locally;
- Services provided in Ethiopia; and
- Goods imported into the territory of Ethiopia.
Exempted Goods and Services
Excise tax is not charged on the following goods and services:
- Exempt goods that meet the conditions set out under the second schedule of the Proclamation (for instance, excisable goods consumed in airplanes for free; );
- Excisable goods exported under customs control;
- Excisable services exported from Ethiopia;
- Excisable goods that the manufacturer has destroyed, with the prior written permission of the Ministry of Revenue, under the supervision of the officer of the Ministry prior to their removal from the factory in which they were manufactured;
- Excisable goods and services that are supplied to entities that are exempt from excise tax by law (e.g. international organizations operating in Ethiopia under an international agreement to the same effect);
- Goods and services exempted from excise tax by the Ministry due to economic, social and administrative reasons; and
- Excisable goods that have been lost or destroyed by accident or force majeure.
Who pays Excise Tax?
The excise tax is paid:
- In respect of goods produced locally, by the producer;
- In respect of services provided locally, by the service provider; and
- In respect of goods imported, by the importer.
Time of Liability
According to the excise tax proclamation, excise tax liability arises:
- At the time of importation;
- When the excisable services are supplied; and
- When the produced goods are removed from the manufacturer’s factory (note that goods consumed in the factory are treated as those that have been removed).
Excise Tax Rate for Some Products and Services
|
Type of Good/Service |
New Excise Rate |
Previous Excise Rate |
|
Any sugar product in the solid or liquid form (including maple sugar and maple syrup and excluding molasses) |
20% |
It was 33% depending on the type of sugar (i.e. there were some exempted sugar products). |
|
Chewing gum and sugar confectionery (including white chocolate), not containing cocoa. |
30% |
0% |
|
Chocolate, containing foods (other than kid’s foods or therapeutic foods) |
30% |
-- |
|
Powder soft drinks--25% |
25% |
30% |
|
Bottle or canned Water |
10% |
20% |
|
All types of soft drinks (excluding fruit juices and therapeutic foods) |
25% |
30% |
|
Beer Made from malt---25% |
25% |
50%--imported |
|
Fermented beverages (with alcoholic content) or beer |
40% (or 11 birr per liter) (35%--if it’s produced from a barely produced locally) |
50%--imported |
|
Any type of wine from grapes or other fruits (with an alcoholic content) (whether it is sparkling or not) |
40% |
50%--imported |
|
Perfume and toilet waters, make-ups, manicure or pedicure preparations, powders for cosmetic use, preparations for permanent waving or straightening, hair lacquers-(excluding shampoo and sunscreen) |
100% |
The applicable rate for perfume and toilet waters was 100% and the others were exempted. |
|
Human hair, dressed, etc; animal hair and synthetic materials for wigs or others |
40% |
0% |
|
Fireworks |
100% |
0% |
|
Plastic bags (festal) |
5% |
5% |
|
Tobacco(not stemmed) |
20% |
20% |
|
Tobacco (wholly or partly stemmed) |
30% or 8 birr per piece |
20% |
|
Any other tobacco products (cigars, cheroot, cigarillos, and others) |
30% or 250 birr per kilogram |
75%--imported |
|
Textile and textile products (excluding mosquito nets) |
8% |
10% |
|
Artificial flowers |
10% |
0% |
|
-Articles of asbestos-cement, of cellulose fiber-cement... Containing asbestos --Fabricated asbestos fibers; Closing, closing accessories, footwear and headgear --paper, millboard and felt ---Fabricated asbestos fibers; Compressed asbestos fiber jointing, in sheets or rolls |
20% |
20% |
|
-Natural pearls, diamonds, emeralds, and any other precious metal (except monetary gold, Catalysts in the form of wire cloth or grill, of platinum, or articles of metal clad ... Of a kind used for lab). |
20% |
0% |
|
-Any video recording apparatus with/without video tuner; and television cameras, digital cameras and video camera recorders |
10% |
40% |
|
-Pedestrian controlled tractors, road tractors for semi-trailers, track-laying tractors, and others; and vehicles(diesel/semi-diesel) with a seat capacity of more than or not more than 15 passengers including the driver |
If used for not more than 4 years-100%; Used for 4 up to 7 years-200%; Used for more than 7 years-400% |
0% |
|
Vehicles for traveling on snow; golf cars, etc, with engines |
If used for 1 up to 2 years—50%; Used for 2 up to 4 years—100%; Used for 4 up to 7 years—200%; Used for not more than 7 years-400%) |
0% |
|
Vehicles with spark-ignition engine of cylinder capacity <1300cc (including three-wheeled cars) |
If assembled domestically, in whole or in part---5%; new imported good—5%; used for 1 up to 2 years—55%; used for 2 years up to 4 years—105%; used for 4 up to 7 years—205%; used for not more than 7 years—405%. |
30% (there was no tax rate on three-wheeled cars) |
|
Other VEHICLES WITH SPARK-IGNITION ENGINE OF CYL.CAP 1300<C <1800 |
If assembled domestically, in whole or in part---60%; new imported good—60%; used for 1 up to 2 years—110%; used for 2 years up to 4 years—160%; used for 4 up to 7 years—260%; used for not more than 7 years—460%. |
60% |
|
Vehicles Exceeding 1800 cc and 3000cc |
If assembled domestically, in whole or in part---100%, new imported goods—100%, used for 1 up to 2 years—150%, 2 years up to 4 years—200%, 4 up to 7 years-300%, more than 7 years—500% |
100% |
|
Other motor vehicles running on electric accumulator |
If used for 1 up to 2 years—50%, 2 up to 4 years—100%, 4 up to 7 years—200%, more than 7 years 400% |
30% |
|
Vehicles other that cannot be categorized above |
If assembled domestically, in whole or in part---30%, new imported goods—30%, used for 1 up to 2 years—80%, 2 years up to 4 years—130%, 4 up to 7 years—230%, more than 7 years—430% |
30% |
|
--Any goods vehicle (including - crane lorries, - mobile drilling derricks, - concrete-mixer lorries |
Used for not more than 4 years-100%; Used for 4 up to 7 years-200%; Used for more than 7 years—400% |
A fixed tax rate of 30% (note that crane lorries, mobile drilling derricks, concrete-mixed lorries were all 0%) |
|
Motorcycles |
New-30% Used-200% If it's a new electrically operated motorcycle, it's 5%. |
0% |
|
Trailers and semi-trailers or vehicles of a kind suitable for tar & pitch boilers used in the construction of roads. |
200% |
0% |
|
Video games of a kind used with a television receiver |
20% |
20% |
|
Pipes and pipe bowls |
20% |
0% |
