New directive expected to boost export


The directive for the new proclamation that revises the old Export Trade Duty Free Incentive Scheme will be ratified in January 2013.
The new proclamation which replaces a six year old law, and aims to boost export oriented businesses, was amended at the end of the last fiscal year at the parliament.
According to the government plan, the directive was expected to be applicable as of November 10, 2012, but after a discussion with stakeholders was held on November 2, 2012 the amendment was suspended.
According to an expert at the Ministry of Industry (MoI), the directive amendment was delayed due to stakeholders’ confusion that the ministry observed at a discussion held in early November. The government bodies: Ministry of Finance and Economic Development (MoFED), MoI and the Ethiopian Revenues and Customs Authority (ERCA) have contributed to the new directive.
According to the expert, on Tuesday November 27 evening, government officials and relevant stakeholders from the industry sectors came together to discuss the directive again. “In addition to the discussion MoI has also sent the amendment document to all stakeholders to give their opinion on the directive,” he said.
At the Tuesday discussion the government told participants that the directive will be applicable as of January 9, 2013.
“Excluding the awareness creation for the stakeholders we also plan to give trainings to experts that work in customs at ERCA,” the expert told Capital.
The new export trade duty incentive schemes will not be limited to a duty draw back scheme (otherwise known as a zero taxation incentive); instead it will offer improved incentives.
According to the document, the bonded export factory scheme, manufacturing warehouse scheme, input supply warehouse scheme and industrial zone scheme are included in the new proclamation.
The new proclamation has also revised the previous and slow duty draw back scheme. In the prior law, exporters had to wait almost an entire year to exercise their duty draw back. But the new law will allow exporters to receive their duty draw back within 30 days after a formal request.
The bonded export factory scheme has been exercised in other countries; aiming to expand industrial export. This incentive will provide industries access to raw materials and other necessary inputs with less customs bureaucracy. The bonded warehouse scheme that was applied to the leather sector in the last two years is going to be applied to other industrial sectors based on the law.
To realize the ambitious five year development plan (GTP) the government is introducing several new measures in various sectors of the economy. The main aim of this legislation is to make duty free tax products which can come from local or foreign sources, to be used in the process of export trading as well as to make the export trade more efficient and successful. It will help in facilitating in the interlinking of local-based raw materials and products process, so as to create a new and modern regimen to encourage traders and companies to boost their exports.