Ethiopia's Ministry of Finance has held a stakeholder consultation on a draft directive governing the implementation of investment tax and customs duty incentives under Investment Incentives Regulation No. 586/2018. The proposal seeks to improve oversight, transparency and accountability while ensuring that revenue forgone through incentives is proportionate to investors’ contribution to economic development. Investors would have to sign performance agreements before receiving incentives, maintain separate accounting records for each project and submit annual reports. Duty-free imports could be used only for their intended purpose, and entities that breach their obligations would face enforcement action. The directive would also consolidate development incentives within a single framework and remove ineffective tax incentives to reduce tax expenditure, improve government revenue and support infrastructure investment.
Ethiopia's Ministry of Finance consults stakeholders on draft rules for investment tax and customs duty incentives
Ethiopia's Ministry of Finance has consulted stakeholders on draft rules to strengthen oversight of investment tax and customs duty incentives. Investors would face performance agreements, project-specific accounting, annual reporting and restrictions on the use of duty-free imports, with enforcement action for breaches. The reform also seeks to remove ineffective incentives and reduce tax expenditure.