Ethiopia’s revised draft investment bill is to be tabled before the Council of Ministers in a month. The bill will be presented to the cabinet after taking into consideration the feedback received from the private sector.
Representatives from the private sector received the draft bill this month and have noted various points that seem to favor the manufacturing sector in particular.
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.
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.
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 bill was also criticized for offering almost no incentives for investment in the education and mining sectors. The authorities expect to handle the mining sector separately and that the education sector was lucrative enough not to require incentives it was said.
The federal structure will offer a unified service that will allow investors to receive land lease, trade licenses, construction permits and TIN from one agency according to the draft bill.
Source: Addis Fortune
