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Ethiopia Investment Proclamation to be Amended

The Ethiopian Investment Proclamation is to be amended for the third time. This legislation has been revised twice since it was passed into law in 2003. It is expected that the current revision will focus on the incentive structure.

A major reason for the revision to the proclamation is apparent loopholes to the manufacturing customs incentive structure according to sources. 

Customs duty privileges that are available to some import substituting industries are not being enforced appropriately said an anonymous owner of a textile company. The main reason behind this breach is the gap in communication between the investment agency and Ethiopian customs authority. 

The Ethiopian Investment Agency and the Revenues and Customs Authority are encountering problems in the interpretation of the proclamation. This uncertainty in turn translates to problems with administering duty exemptions for the appropriate industries. 

A committee set up under the Ministry of Industry (MoI) reviewed possible additions to the new proclamation.  The committee was made up of professionals from the Ministry of Finance and Economic Development (MoFED), the Ethiopian Revenues and Customs Authority (ERCA) and the Textile and Leather Industry Development Center (TLIDC).

The amendment is expected to clearly lay down customs and tax incentives to manufacturing sector. It is also anticipated that the extent of the incentives would be revised to match the incentive packages offered by other exporting countries according to sources.

Source: The Reporter