Duty-free privileges partially banned


The Government has temporally banned some duty-free privileges until the Ministry of Revenue (MoR) and the Custom Commission finish reforms targeted to stop abuse. Lack of standard on how duty-free privilege is being given out had been damaging the country’s income according to Adanach Abebe, Minister of the MoR.
When the General Auditor of the Federal Auditor General (OFAG), Gemechu Dubiso, addressed parliament last week he said people were abusing duty free privileges.
Approval of duty free requests is disorganized and lack clear standards, he stressed.
“The government gives up to 60 billion birr in revenue over a year for duty-free privileges without seeing as much benefit as much as we are waving,” said Gemechu. “The Ministry hasn’t follow-up with imported items permitted and people are bringing in more items than they are entitled to.”
He stressed that many investors re-sell items on the market, usually rebar.
Companies, he added, that are permitted to export their products are engaged in the local market sales. When the government waives its revenue it tries to encourage exports but these companies are not helping with that goal.
Adanech Abebe, agreed saying that actions are being taken to stop duty free abuse.
“There is a practice, we found different Bills of Quality (BoQ) were given for the same projects if we look at hotel projects as an example,” said Adanech. “So we need to have a proper standard for the way privileged projects operate.”
The minister stated that legal gaps are the main reasons duty free privileges are being handled in a disorganized manner and that this would soon change.
Non-centralized service is another problem as 18 organizations give out duty-free privileges, which is unique to Ethiopia.
“We are considering how to create a centralized body to give duty free privileges,” said Adanech.
They are also looking at developing a manual to help alleviate the problem.