Discusses pricing formula and other fees, value-added tax (VAT), etc.
Last Published: 10/30/2019

Commercial imports are subject to up to five separate import taxes, which are all collected by the Ethiopian Customs Commission (ECC). These taxes are charged in a compounding, sequential order as follows: customs duty, excise tax, value added tax, surtax and withholding tax (not compounding). All taxes are payable at the time of import.

Custom duties range from 0% to 35% and are levied on CIF (cost, freight and insurance) price applied based on Harmonized System (HS) tariff codes. The calculation of the total customs duty is based on the CIF (Cost + insurance + freight) of the imported good.
An excise tax is imposed on products deemed to be luxury items or other demand inelastic products. The tax is product dependent and ranges between 10 to 100 percent. The excise tax is applied to 19 specified classes of products identified by ECC.

The value added tax (VAT) is a flat 15 percent tax on all imports, unless otherwise exempted.The surtax is a flat tax of 10 percent on all imports, unless otherwise exempted.

The withholding tax is a flat tax of three percent on the CIF price of all imports, unless otherwise exempted. A withholding tax may be offset against qualified business income taxes.

The former Ethiopian Revenue and Customs Authority was restructured in 2019. According to the new structure, the Ministry of Revenue is the highest authority with oversight over customs issues. The Ethiopian Customs Commission operates now under the Ministry of Revenue and is led by a commissioner.

ECC has developed an import tax calculator to assist traders in determining the applicable taxes for their products. The calculator requires entry of the following information: six or eight-digit Harmonized Tariff Schedule (HTS) code, cost of the imported item, freight, and insurance, as well as any other cost. The HTS code along with the associated import taxes can be found in ERCA’s HTS. Please visit Ethiopian Ministry of Revenue website http://www.erca.gov.et/.

The Government of Ethiopia (GOE) sets prices for local transportation fares, petroleum, and fertilizer; with periodic reviews on the prices to reflect prevailing local market situation.

Prices of locally produced products have increased significantly in recent years. The relative prices of imported goods are also high, due to customs duties, transportation costs, and a 15% devaluation of the local currency, the Birr, against the U.S. dollar.
For more information on customs, please refer to the Ministry of Revenue website.
For more information on the African Growth Opportunity Act please refer to the following link.

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