The Ministry of Finance of Ethiopia said it has exempted electric vehicles from value added tax (VAT), excise and sur Sur taxes.
In addition, the import tax on electric vehicles is also reduced, according to the statement the Ministry shared on its official social media page. The tax rate for fully imported electric cars has declined to 15 percent, while the semi-assembled vehicles will only be taxed 5 percent, according to the new directive of the Ministry.
The decision of the Ministry is expected to encourage investment in electric cars assembly and those engaged in import. It is also believed to benefit a lot the final consumers giving access to affordable vehicles. Over the past few years Ethiopia has been importing fully and semi-assembled electric cars. Owned by Ethiopia’s Olympic Gold medalist Haile Gebressilasse, Marathon Motors has been engaged in assembling of electric vehicles.
In addition, recently Green Tech Africa has also imported dozens of electric cars and expressed its plan to commence assembling some 5,000 vehicles locally in a short period of time.
In Ethiopia cars are the most expensive products due to the high import taxes, which at times made the Government of Ethiopia to huge profit per vehicle more than the manufacturing companies in Japan do. Meanwhile in recent years the Government has been encouraging import of new cars decreasing the import tax in an attempt to discourage used vehicles import that are often associated with pollution and road traffic accidents.