Ministry of Finance announces low tax reform to encourage electric vehicles

Addis Ababa, September 16, 2022 (FBC) – Ethiopian Ministry of Finance has announced the implementation of a tax reform that encourages industries and importers engaged in electric vehicle investment, and benefits the society in general.

As a result of the tax reform, the Ministry confirmed that imported and domestically manufactured electric public transport vehicles, automobiles and cargo vehicles will be subject to lower customs tariffs and will be exempted from value added tax, excise tax and surtax.

The purpose of the tax reform is to make the rapid growing number of vehicles in Ethiopia compatible with environmental safety in a policy framework, to implement a transportation system that does not harm the public’s health, does not affect the climate and biodiversity, and uses renewable energy sources properly, and to enable electric vehicles to be offered to the public at an affordable price.

The Ministry declares that disassembled electric automobiles that are imported and assembled in the Ethiopia will be completely exempted from customs duty, excise tax, value added tax and surtax.

As for partially disassembled and assembled imported electric automobiles, only 5% customs duty will be imposed on them and will be exempted from excise tax, value added tax and surtax, the statement confirms.

When fully assembled electric automobiles are imported into the country, only 15% customs duty will be imposed on them, but they will be completely exempted from excise tax, value added tax and surtax.