Revenue generation, not protection of local industry, appears to be the primary purpose of Ethiopia’s tariffs. Goods imported from the Common Market for Eastern and Southern Africa (COMESA) members are granted a 0 to 10% tariff preference, (depending on the type of goods) under the Free Trade Agreement (FTA). Tripartite FTA membership among COMESA, the South African Development Community (SADC), and the East African Community (EAC) members will allow zero tariffs and duties, which will impact Ethiopian trade when it completes the COMESA accession process (timeline for completion is unclear). Customs duties are payable on imports by all persons and entities that have no duty-free privileges. In 2019 Ethiopian customs ceased its policy of reducing, or eliminating, customs duties on imports of knocked-down and semi knocked-down industrial inputs. This new revision has reclassified these products to be treated with basic tariff rates.  

Ethiopia aspires to be a leading manufacturing hub in Africa by 2025. Accordingly, the GOE prioritizes industrial park development and expansion. The GOE offers duty-free import incentives for investors in certain sectors, especially for those located in at the industrial zone and planning to export goods and generate foreign currency.   

Both VAT and excise taxes are imposed on imports.  The supply of goods and services by registered persons is subject to a 15% VAT for all goods and services. Some products and services are exempt from VAT. These include financial services, educational services, and healthcare and transportation services. In February 2020 Ethiopia reformed its excise tax policy and increased excise taxes, on specific products through passage of a new excise tax proclamation.