Ethiopia - Import TariffsEthiopia - Import Tariffs
Revenue generation, not protection of local industry, appears to be the primary purpose of Ethiopia's tariffs. Goods imported from the Common Market for Eastern and Southern Africa (COMESA) members are granted a 0 to 10% tariff preference, (depending on the type of goods) under the Free Trade Agreement (FTA). Ethiopia plans to become a full COMESA FTA member in five phases by 2021. In addition, Tripartite FTA membership among COMESA, the South African Development Community (SADC), and the East African Community (EAC) members will allow zero tariffs and duties. Customs duties are payable on imports by all persons and entities that have no duty-free privileges. The rate of customs duty ranges from 0% to 35% with an average rate of 17 percent. In recent years, Ethiopia has reduced customs duties on a wide range of imports, including the removal of tariffs on agricultural equipment, but duties still remain high on certain items, such as vehicles. Other taxes may also be imposed on imports. These are excise duties on selected goods (e.g., tobacco), surtaxes on many imports and a 15% value added tax (VAT).
Ethiopia aspires to be a leading manufacturing hub in Africa by 2025. Accordingly, the GOE prioritizes industrial park development and expansion. The GOE offers duty-free import incentives for investors in certain sectors, especially for those located in at the industrial zone and planning to export goods and generate foreign currency.
Both VAT and excise taxes are imposed on imports. The supply of goods and services by registered persons is subject to 15%VAT for all goods and services. Some products and services are exempt from VAT. These include financial services, educational services, and healthcare and transportation services. Excise tax is assessed on eighteen classes of goods, applied equally to domestically produced and imported goods, and ranges from 10% for textiles and most other goods, to as high as 100% for alcoholic beverages.
Table 1: Average Import Tariff for Key Sectors
|Average Import Tariff (%)|
|3||Financial and Banking||12|
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Ethiopia Tariff Rate Quotas Trade Barriers