The Ethiopian government announced that it has decided to lift taxes levied on basic food items in a bid to control the high rate of inflation and help lift the purchasing power of the society.
Accordingly, wheat is now exempted from import tax, while edible oil, sugar, and rice are exempted from both import tax and any type of tax duty when sold locally. Spaghetti and macaroni are exempt from value-added tax (VAT) both when being imported and when sold locally, while egg is exempted from value-added tax (VAT) duty.
Eyob Tekalign, Ethiopia's State Minister of Finance, while making the announcement, said the measure causes the government to lose money "in billions" in an effort to alleviate the burden of inflation. In spite of this, he noted, they have found out via a study they conducted that the tax exemption does not bring about the price reduction necessary, and additional measures to increase the amount of supply are necessary.
In line with this, the government will work continue to work on increasing the supply of basic food items, raise agricultural productivity, as well as continue to make necessary fiscal policy adjustments and control of the market, Mr. Eyob remarked.
Source (Including Image): Ministry of Finance (website)