Ministry of Finance announced that imported and domestically produced electric vehicles would be subject to lower customs tariff and full VAT, excise, and SUR tax exemptions while electric automobiles which would be assembled in Ethiopia would be fully exempted from customs duty obligations. However, imported electric automobiles will be subject to 15% customs duty.

According to the Ministry, the purpose of the tax reform is to make Ethiopia’s rapidly growing number of vehicles compatible with environmental safety policy and enable electric vehicles to be offered to the public at an affordable price. The reform also aims at protecting public health, the climate, and biodiversity.

Ethiopia spends USD 4 billion annually to import fuel. In this regard, the Government of Ethiopia is promoting electric vehicles to curb the cost of fuel which is further exacerbated by the current global fuel price inflation. It plans to import 4,800 electric buses and 148,000 electric automobiles until 2030.

Source: Ministry of Finance

Additional source: Xinhua