The Ethiopian government plans to generate 78.9 billion Birr in additional domestic revenue for the upcoming 2019 Ethiopian fiscal year by eliminating various tax exemptions and tax holiday frameworks. According to the draft budget presented to Parliament by the Ministry of Finance, the sweeping reforms aim to significantly bolster the nation’s internal funding mechanisms. This strategic shift marks a departure from previous fiscal policies that offered lenient tax reliefs to various sectors.
Under the new plan, items that previously enjoyed duty-free status—including washing machines, medical equipment, and assistive devices for persons with disabilities—will now be subject to revised, lower-rate tariffs. This specific adjustment in customs duties is projected to bring in 22.5 billion Birr to the state coffers.
Furthermore, the government expects to secure another 22.5 billion Birr by lifting existing income tax holidays for businesses. Alongside this, the introduction of a new excise tax stamp system is anticipated to generate an additional 33.8 billion Birr, rounding out the targeted 78.9 billion Birr boost from these combined tax policy revisions.
These aggressive tax reforms are part of a broader macroeconomic strategy to enhance domestic resource mobilization. In total, the government aims to collect a staggering 1.6 trillion Birr in the coming fiscal year through various policy amendments, tax increases, and non-tax revenue streams.
Parliament will review the draft budget in the coming sessions as citizens and businesses brace for the impact of the impending policy shift. The Ministry of Finance maintains that these measures are essential for sustainable economic growth and reducing reliance on foreign aid.