The new Excise Tax Amendment Proclamation No. 1287/2023 became effective as of April 27, 2023 in Ethiopia.
The Proclamation abates the excise tax rate for imported new vehicles, stating the earlier rates were “exaggerated.” It also introduces a 5% excise duty on telecommunication services, including internet, voice, and SMS services. As per the Proclamation, this was introduced simply to generate more revenue for the government.
Moreover, the new Proclamation claims that granting special tax and duty privileges with regard to excise tax inflicts damage on “the environment.” Hence, the Proclamation imposes excise duty on previously non-excisable goods (exempted goods). For instance, vehicles for the use of persons with disability are no longer free from excise duties. Goods imported by investors, in accordance with the Investment Incentives Regulation, are subject to excise duty (although other custom duty-related incentives are still granted to investors).
It also found it necessary to deprive persons and organizations of special tax and duty privileges for excisable services. As such, it maintains diplomacy-related privileges but takes away international organizations’ and aid agencies’ privileges to be exempt from excise duty for excisable services.