E-Commerce as Trade Category
E-Commerce companies can now register as an “Electronic Platform Operator” (Code 85125) or as an “Electronics Intra Platform Operator” (Code 85126).
The Ministry of Innovation and Technology (MInT), along with the Ministry of Trade and Regional Integration, has classified e-commerce as a trading category. It was back in October 2022 that MInT wrote a descriptive letter to the Ministry of Trade and Regional Integration to explain how e-commerce trade should get licensed. The main aim of this letter is to request the inclusion of “electronic commerce platform operators” and “electronic commerce intra-platform operators” in the Standard Industrial Classification and the following explanation helps to answer this question.
“Electronic commerce platform operator” and “Electronic commerce intra-platform operator” are defined as legal entities that facilitate online trading activities by connecting buyers and sellers or service providers and receivers.
Electronic platform operators can determine the quality and price of services or products provided on the platforms; therefore, these operators are expected to get a certificate of qualification from the Ministry.
The source of income for these entities is the service they provide to buyers and sellers and the value they add to this process. They regulate and control the day-to-day activity of the platforms and own and operate platforms that allow for aggregating electronic commerce operators that sell commodities or provide services through an electronic commerce platform. Since their main source of income is the sale of goods or services on their platforms, they are required to get a license from the appropriate government organ. However, these business categories are not included under the current Ethiopian Standard Industrial Classification Directive.
Therefore, the Ministry requires the licensing of these entities without the need for a new commercial activity category by simply registering in fulfillment of the following requirements:
- Registered .et or another domain
- Proof showing that it establishes a system that complies with the electronic transaction and electronic message communication provisions.
- show that the rules and regulations provided by the business entity comply with the proclamation
- provide agreement with express logistics service providers except those giving drop shipping service
- show that their electronic payment system is recognized by the appropriate controlling office and
- Provide a document that shows their platform is in connection with the tax law or their sales are readable by the Revenue Bureau’s technology.