Dozens of taxi associations are one step closer to realising their dream of buying 1,500 vehicles after federal authorities gave the nod of approval last week. The cars are to be assembled domestically following imports of the parts, duty-free.

The Federal Transport Authority will forward letters of recommendation to the Ministry of Finance, which will review the documents. It informs the Customs Commission of the number and type of vehicles to be designated duty-free for imports by assemblers the associations have made agreements with, according to Baye Mulegeta, director of Urban & Rural Transport Service at the Authority.

Officials of the Authority have approved proposals from 23 associations interested to buy vehicles with a seating capacity of between four and 10 passengers from domestic assemblers. Another 17 associations secured support from the Ministry of Transport, a prerequisite for the duty-free privilege. Their proposals are still under review by the Authority, disclosed Taye.

The associations are looking to take advantage of a directive issued by the Ministry of Finance in May 2021, allowing the import of semi- and fully-knocked down vehicles free of excise tax and duty. The amended excise tax law directs all motor vehicles imported within three years of manufacturing to be considered 'new' when calculating duty and excise tax. The directive aims to institutionalise the imports of taxis using duty-free privileges, which has so far been disorganised and uncoordinated.

The last five years have seen the import of over a thousand taxis using duty-free privileges, though there was no legal framework that served as a guideline to review such requests.

Ze-Lucy Meter Taxi S.C, a consortium of taxi associations, has imported 751 vehicles in 2016 using duty-free privileges. HelloTaxi, an importer of metre taxis, also brought in over 400 cars in the past two years.

Officials say the initiative is being undertaken partly to support domestic assembly plants, which will be in charge of importing the vehicles.

Last year, the Addis Abeba City Administration designed a project to replace the blue-and-white LADA taxis in the capital, processing a duty-free privilege for associations that were allowed by federal authorities to import 10,000 disassembled vehicles for taxi services. Elauto Engineering Plc, incorporated three years ago with a capacity to assemble 100 vehicles a day, has shown interest to make a deal with 23 associations, according to Bekele Abebe, the general manager. The company has so far assembled close to 500 vehicles.

Elauto Engineering asks 650,000 Br for LADA taxis while 100,000 Br more for other vehicles.

"We've opened two dozen branch offices to serve the growing demand," said Bekele, whose company is expanding its presence beyond the capital.