Though the ultimate reason for the imposition of tax on selected items is to generate revenue, there are taxation systems that primarily aim benefiting citizens in many wise. One of such taxes is excise tax or sin tax.
Needless to say that the government imposes higher prices on selected items to curb the consequences of using excessive hazardous goods on health. To this effect, on items like alcoholic beverages, tobacco and other luxury goods, the government imposes higher prices.
Many studies shows that excessive use of tobacco, alcohol and other products such as sugar-sweetened beverages (SSBs) are significant contributors to the global epidemic of non- communicable diseases.
With the view to discourage unhealthy consumption and many more reasons, the nation is amending its excise taxation system which was devised some 17 years ago.
The draft proclamation is expected to promote investment, encourage manufacturing/assembly automotive industries, eliminate contraband, and build regular taxation system and so on. Most importantly, it will improve the living standard of citizens and empower women.
Mulay Weldu, Tax Policy Director at the Ministry of Finance indicated that the draft Tax proclamation apart from its economic benefits would enable the nation to implement its green economy and health policy.
As citizens’ way of living is changing over times and keeping its day to day routine might be unaffordable, the government has improved taxation system on few items. One was removing the excise tax that was levied on washing machines on both cloth and dishes.
“Now that people have started living on condominiums, the government has removed the tax on washing machines on both clothes and dishes which was 80 and 30 percent respectively.”
The tax exclusion of the above materials could also expect to play an undeniable role in minimizing women’s burden in house chores.
With the view to implementing nation’s green economy, the government has levied high tax on importing used cars to minimize the consumption. Importing used cars, apart from its negative impact on the economy due to its cost, has influence on climate change. On the other hand, the new rule will include tax imposition on importing plastic bag.
The government has removed tax imposition on kids playing materials which are believed to lift up their way of thinking while it has decreased the levied tax on video cameras that are used in the film industry from 40 to 10 percent.
The Ethiopian Herald February 5/2020
BY BETELHEM BEDLU
