Africa Ethiopia FDI Legislation Tax

Ethiopia considering amendment on privatisation, investment and excise tax

The Ethiopian government is considering an amendment on Privatization, Investment and Excise Tax. The country’s legislative, House of People’s Representatives (HPR), referred a draft law for the privatization of public enterprises and two other economically significant bills to the relevant parliament standing committees for further study and considerations.

The draft legislations referred to the committees are point attraction to economists, lawyers and investors since they will have a serious implication on the macro economic situation of the country. These bills are Investment Proclamation, the Proclamation to provide for the Privatization of Public Enterprises, as well as the Excise Tax Proclamation. The draft public enterprises proclamation for privatization of public enterprises has in effect remained unchanged for almost 20 years.

The intention of the legislations is to revisit the provision of the law that is important to broaden the role and participation of the private sector in the country’s economy. Further, it aspires to increase the capacity and finance of public enterprises for better development and competitiveness in the competing market at large.

The other purpose of the amendments is to improve the efficiency of public enterprises, enhance their competitiveness, and develop their access to capital, which is considered a deficit in the last performance years. Improving the quality and accessibility of their services is also another factor to amend legislations.

Likewise, amending the investment law aspires to maximize the investment activities in order to accelerate the economic development of the country and ensure its sustainability. In addition, it is aimed to strengthen domestic production capacity by librating the hard provisions of the existing law. However, the draft bill on the excise tax attracts different importers since it considers new issues in the list that are subject for the tax.

The progressive acts of the Ethiopian government have both support and critique especially towards the liberalization of the economy. Apart from the foreign direct investments that have an active participation in the country, the amendment process also attracts the international law firms, transnational corporations and other entities that have a direct or indirect stake in Ethiopia.

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