The Ethiopian Ministry of Mines drafted a proclamation to decrease Ethiopia's mining income tax from 35 to 25 per cent.According the draft, the reduction is aimed at boosting the mining industry in Ethiopia to meet its targets set in the five-year Growth and Transformation Plan (GTP).
On Thursday, the ministry presented the draft proclamation to the House of Peoples’ Representatives. The House discussed on the draft proclamation and remanded it to the Natural Resources and Environmental Affairs Standing Committee.
The justification cited for the reduction in the draft is the need to make Ethiopia's mining industry competitive. In comparison, many African countries which have successfully exploited their mineral resources have a lower income tax rate than Ethiopia.
So far, MIDROC Gold is the only company engaged in large-scale gold mining. Recently, Ezana Mining secured a large-scale gold mining license from the ministry. The British company Nyota Minerals has also applied for large-scale gold mining in its Tulu Kapi gold mine in the Wollega zone of Oromia Regional State.
Revenue from minerals and quarries contributes only one percent to the country’s GDP. The investment capital in the mining sector has reached 14 billion birr. Annual export earning from minerals resources reached USD 645 million in the last budget year, according to the ministry.
Source: The Reporter