Customs Commission Backtracks on Pre-Float Import Tax Calculations
Ethiopian Customs Commission has announced revised import tax regulations allowing shipments documented before the currency liberalisation will be subject to import taxes calculated based on the exchange rate prevailing at the time of documentation. However, for shipments documented after the reforms, the Commission set taxes and duties be determined using the daily indicative exchange rate set by the central bank.
The announcement comes a week after Commissioner Debele Kabeta issued a directive requiring all customs branches to adjust declaration rates to the current exchange rate, even for goods registered before the currency liberalisation. It also mandated the re-collection of taxes on imported goods previously assessed at the old rates.
The reform has had immediate consequences for importers, who are now facing higher costs. Businesses that had opened Letters of Credit (LCs) before the change were particularly hard hit, as they were forced to pay duties calculated at the new, higher rates, regardless of the exchange rate in effect when the LCs were issued. This has led to widespread disruption, with companies scrambling to cover the unexpected additional costs.
Debele noted the Commission’s efforts to adapt to the new economic landscape. He urged importers holding goods in dry ports due to misunderstandings to clear their shipments promptly. Failure to comply, he warned, could result in legal action.
