During its 31st regular session on Thursday, the Ethiopian Ministers Council, approved a significant bill. The council examined and passed export trade tax incentive amendment draft proclamation.
The council deliberated on the bill aimed at amending the proclamation of export trade tax incentive schemes, with the objective of enhancing foreign currency earnings essential for industrial development and investment, addressing constraints in incentivizing exporters, and bolstering competitiveness through a framework that motivates industry stakeholders.
After thorough discussions on the proposed amendment, the Council unanimously decided to forward it to the parliament for deeper examination and approval.
Ethiopian government is facing a mounting challenge in the form of dwindling foreign exchange reserves. Coupled with that is ongoing depreciation in Ethiopia birr. Ethiopia birr has lost more than 90% of its value. It is being traded at 120 per dollar in black market while official exchange rate is around 57 per dollar. The changes to export trade tax schemes are aimed at boosting declining reserves.
This month, Ethiopian government took another historical economic decision, opening the economy to foreign investors. Foreigners can now invest in Real Estate. Export, Trade, Whole Sale and other sectors.
Details of the trade tax incentive amendment draft proclamation approved by the Ethiopian Ministers Council will be published after its approval by the House of People’s Representatives (HOPR). But as a policy the Ethiopian government has decided to give tax incentives to boost exports. Tax incentives could attract both local and foreign entities.
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