The Ethiopian parliament (House of People's Representatives) approved into law the revised excise tax law with a majority vote, 4 against and 7 abstentions. The approval came after the bill received a revision on the initial draft, further reducing the tax cut on cars and bottled water.
As per the newly approved law, excise tax levied on new vehicles with engines below capacity of 1,300cc is reduced to 5 percent from the initially proposed 30 percent.
Furthermore, the excise tax on 1-2-year-old cars has been reduced to 55 percent from 80 percent, on 2-4-year-old cars to 105 percent from 130 percent, on 4-7-year-old cars to 205 percent from 230 percent, and on those above seven-year-old to 405 percent from 430 percent.
In a related note, the excise tax imposed on bottled water is reduced to 10 percent from the proposed 15 percent.
The excise tax on tobacco, however, has been raised to 8 birr per pack from the initially proposed 5 birr.
The House has voted to drop the proposed 5 percent tax imposed on telecom services.