• Price increase not likely as feared
ADDIS ABABA – The draft excise tax proclamation is intended to encourage domestic industries and is not likely to cause significant change that could lead to price increment on goods and services, says Ministry of Finance.
Briefing journalists yesterday, Eyob Tekalign, Ministry of Finance, Minister said the excise tax draft proclamation is aimed at encouraging domestic automotive industry and promoting consumption of new vehicles as opposed to used ones. The draft proclamation reduces the taxation of new vehicles with less than 200cc to 5 percent.
Eyob revealed that new investors are joining the automotive industry following the new draft excise tax since it encourages the domestic plants. They are setting up new assembly plants.
Tax increment on alcoholic drinks and cigarette was also insignificant. This is mainly due to the adverse effect of the increment on both industries. The previous 30 plus five on cigarette industry is raised to 30 plus six whereas no increment is made on alcohols, he said.On the contrary, the revised draft proposes reduction of taxation on water industry due to the good work of the companies in reducing the social cost that would result from them. The companies are recycling their bi-products, as to him.
He also noted that the confusion created regarding taxation is due to intentional distorting of information to achieve malicious intents. The distorters created the misinformation to add unnecessary price increment on goods and services. Such retailers would be identified and held responsible, said Eyob.
There is no tax increment on basic goods and services such as oil, sugar, and salt that follows the revised draft, exposed the briefing.
The Ethiopian Herald January 18/2020
BY GETAHUN LEGESSE
