The Ministry of Finance & Economic Cooperation (MoFEC) is ranking manufacturers by value addition for duty free benefits based on a new directive to be approved this month.

The former directive No.35/2013 used to give import privileges for only 30 percent or more value addition but the new one will have wide range from 0.05 percent to 40 percent.

The new directive has been drafted through a committee established a year ago including members from the Ethiopian Revenues & Customs Authority (ERCA), the MoFEC and the Ministry of Industry.

The new draft includes a sector specific requirement that takes into consideration the human resource and technology capacity of each beneficiary.

The lowest value addition of 0.05 percent will be given for mobile phone assemblers and 40 percent for breweries. The textile sector will have 21 percent. It will also enjoy a two-to six-year income tax exemption.

Birtukan Girma, Port Clearance Audit Director at ERCA, told Fortune that “The committee takes into consideration the reality on the ground; the level of development of the sector and capacity of local manufacturers.”

She also said: “A study has confirmed that there are hardly any manufacturers that meet the 30 percent value addition requirement so far.”

Source: Addis Fortune