The world is laughing at Ethiopia. They are laughing because they cannot understand how Ethiopian importation tax is formulated. The tax system is a system that puts self in a defeating position; it simply blocks the country’s progress, the progress of industries such as tourism, construction, health sector, etc.
Custom authorities, need not copy and paste regulations from developed countries directly, but to analyze the actual situation of the country and develop a methodology tailored to it.
The tax payment upon importing materials from foreign countries to Ethiopia costs more than the sum of the purchase cost of the materials itself. Luckily, recently, they have improved tax for those materials related to agriculture. This is a good step but, still, it is not enough to bring a change in the country.
Assuming a car costs $24, 000 including transport and insurance cost. The payable tax upon importing the car costs more $30,376.83. This is an addition on top of the amount of purchase cost. A 125% additional payment from the original cost of the car is irrational. What does it mean to request a pay more than the purchase value of the material itself? Is this logical? calculate the importation tax online here
This means a doctor cannot import a microscope or an engineer cannot import a Theodolite or Total Station due to the high tax cost incurred on materials. Is that helping the country?
Still, those tax exempted list of materials are not exhaustive, it needs reevaluation. There are lots of chemicals that help run industries and needs to be tax exempted.
It is imaginable that having one small material may bring big progress or solve a big problem. Then why high cost on importing materials? It must be recognized that even customers do have a right to choose. If one chooses to drink Heineken beer his choice should be respected and he could be able to pay less.
It is obvious that one cannot produce or fabricate all materials from scratch. It is customary to buy certain materials from other countries. There is a question of availability of raw materials as well. It is impossible to produce everything in one place. Especially, in a country like Ethiopia, this is the reason why the cost of importing materials has to be easy. Otherwise the country s’ progress will take longer, and as a result, poverty stays long. Other options also must be considered to put the country into a competition such as allowing foreign factories to enter and work, if they choose to.
The idea of the high tax might be imposed, among others, simply to discourage citizens from importing materials using hard currency, thinking that this help minimizes the hard currency expenditure. However, the same law discourages people who do have hard currency deposits outside of the country. The short sighting of the tax regulating body, it may be the Ministry of Finance or custom authorities, caused the country to fall into recurrent poverty.
Even highly developed countries import materials more than they produce. It is not shame to import things from other countries; it is simply exchanging knowledge and resources. Importing materials that are not available in the country help the country to stay competitive in the market such as tourism etc.
What do you tell a tourist if he can’t find what he needs in the country? Oh! we don’t like this material………no! no! we do not like it! we don’t like Mexican PIZZA! we don’t like rice….. we only like injera! ………….please respect the choice of others! Everyone has the right to enjoy whatever he likes. It is barbaric and primitive not to let others choose for themselves and enjoy their choice.