ADDIS ABABA – Ministry of Finance in collaboration with Addis Ababa Chamber of Commerce and Sectorial Association announced that, it is going to amend excise tax which takes in to account the benefit of the business community.
Excise tax in Ethiopia is imposed and payable on selected goods such as, luxury goods and basic goods which are demand inelastic. Moreover, it is believed that imposing the tax on goods that are hazardous to health and which are causes to social problems will reduce the consumption of such goods.
Ministry of Finance and Addis Ababa Chamber of commerce and sectorial association conduct a study in collaboration with Ethiopian Revenue and Customs Authority (ERCA) to amend the Excise Tax.
The study is aimed at making efficient tax system following the adjustments made along with the latest income tax and tax administration proclamations. In addition to this, the study will put into consideration the global market.
Commenting on the development, Girma Weldetsadik researcher at the chamber said the study aimed at making some improvement in line with recent income tax adjustment. The objective of imposing excise tax is to raise revenue for general purpose and to deal with negative externalities, he said.
Yohannis Woldegebriel Director at Addis Ababa Chamber of Commerce and Sectoral Associations Arbitration Institute said the, draft study would soon be discussed by federal and state authorities later by gathering business people, business people, and other concerned bodies, of the chamber explained.
Yohannis pointed out that, the main reason to amend the bill is in order to protect both the government and private sectors benefit. In addition the bill is going to amend to protect tax fraud which happened in private sector. According to him, awareness building activities are underway to increase tax income. The chamber is doing its best to create conducive environment to benefit private sectors, he said.
By explaining that, the private sector is an engine of the economic growth of the country, the authority by itself and the government should create conducive environment which focuses the private sector, he elaborated.
He further stated that, the amendment of the law process is on the way, and by discussing and conducting relevant information from the business community the authority will present draft for the parliament after the community agreed on the draft he said.
Francesco Gaglioppa Tobacco Taxation Director Corporate Development at JT International said that, the most common products that include an excise tax are alcohol, tobacco, petroleum and gasoline. These kind of product or service are subject to excise tax, and the companies are responsible for collecting and paying that excise tax to the appropriate federal and state authorities. Such kind of products may be included under excise tax due to their health related problem and the like.
The Ethiopian tax system consists of direct and indirect taxes. The direct tax categories include agricultural income, land use fee for farmers, personal income, rental income, business profit, interest income and capital gain tax. The indirect taxes includes such as VAT, turnover tax, excises, stamp duties, customs duties, and export taxes.
The Ethiopian Herald April 27/ 2011
BY HAILE DEMEKE
