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Federal Gov't Enacts Tax Exemptions

The federal government has lifted taxes on consumer goods including wheat, edible oil, sugar, rice, pasta, and eggs. The decision comes at a time when inflationary pressure is at its highest in a decade. Headline inflation hit 30.4pc last month, while food inflation registered at 37.6pc, according to the Central Statistics Agency(CSA). The measure lifts duties and value-added tax for imported or locally-produced edible oil, sugar, Pasta, Macaroni and rice while imported wheat is only subject to duty tax exemption. Eggs have been exempted from value-added tax only. The decision came into effect last week and will remain applicable indefinitely. The franco-valuta privilege that was given to importers of such consumer goods six months ago has also been extended for an additional six months. "We may lose revenues because of the exemptions but it would be instrumental to reducing the rising cost of living," said Eyob Tekalign (PhD), state minister for Finance, during a press briefing held last week. Admitting that tax exemption will not be sufficient to ease inflation, the State Minister disclosed the government would be engaging in regulating supply-side activities as well.


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