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Depreciation on Duty-Free Imports Faces no Change


May 25 , 2019
By FASIKA TADESSE ( FORTUNE STAFF WRITER )


While removing the 30pc depreciation applied to customs duties on imported second-hand items, the government will retain the 10pc annual depreciation on imported items with duty-free privileges.

While removing the 30pc depreciation applied to customs duties on imported second-hand items, the government will retain the 10pc annual depreciation on imported items with duty-free privileges.

A directive issued by the Ministry of Revenues on May 15, 2019, has fully lifted the uniform 30pc depreciation applied across imported used items, regardless of their age. However, the directive, signed by Adanech Abebe, minister of Revenues, left the depreciation on used items with duty-free privileges unchanged.

The 10pc annual depreciation applied to imported items with duty-free privileges will remain in place, according to Addis Ayele, price valuation director at the Ministry of Revenues, which collected 163.3 billion Br in revenues in the first 10 months of the current fiscal year.


While levying customs duties on imported used items, customs officials of the Ministry have been deducting 30pc depreciation on the value of the items, according to the former directive. They were also applying 10pc annual depreciation on used items imported by expat employees of non-governmental organisations and embassies and by those that are entitled to duty-free rights. The depreciation is applied when they transfer the properties to third parties.

The new procedure outlined by the directive has already caused a price escalation in the second-hand vehicles market around the capital.


Since last Thursday, the price of used imported vehicles has drastically increased with a minimum rise of 80,000 Br depending on the model and brand, according to the car dealers Fortune spoke to. Most of the car dealers have been hoarding their vehicles with the anticipation that prices would go higher.




Retailers have already increased their prices despite the fact that customs officials at the Ministry have not yet started applying the new procedure as they wait for clarification and explanations from the head office, according to Alemayehu Anticho, manager of Qality Customs Branch Office of the Ministry.

Currently, the officers are only clearing duties of pending imported items that arrived before the issuance of the new directive. But they are no longer issuing customs declarations on the vehicles.

"The final declaration of the pending items will be issued after we get clarification from the Ministry," said Alemayehu.


The officers have stopped processing used imported items that have already arrived at dry ports and the Port of Djibouti after the issuance of the directive until they receive clarification.

In the last fiscal year, the county has imported both used and brand new cars valued at 544.35 million dollars. At a national level, there are around 977,000 registered vehicles, according to data from the Ministry of Transport.

Since the new directive was issued, the price of automobiles has significantly increased in the market by a minimum of approximately 80,000 Br.



PUBLISHED ON May 25,2019 [ VOL 20 , NO 995]






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