The Addis Ababa Revenues Bureau has issued a directive ordering vehicle commission agents and brokers operating across the capital to clear client-owned vehicles from their business compounds, saying the widespread practice is illegal under existing tax legislation.
Following the bureau’s warning, many car brokers across Addis Ababa have begun clearing their premises. Enforcement has gained momentum over the past [48] hours, reshaping the city’s auto-yard landscape.
Affected business owners have voiced concerns, arguing that the sudden enforcement is unfair and will severely disrupt their day-to-day operations and livelihoods. However, they said they are complying with the order and removing displayed vehicles from their properties to avoid regulatory penalties.
The bureau said its decision is based on existing legislation. Under the Federal Income Tax Proclamation No. [979/2016], registered taxpayers are required to pay income tax based on their earnings. The amended VAT Proclamation No. [1341/2024] defines the “place of supply” as a supplier’s registered place of business, warehouse, or authorized public showroom.
Applying these provisions, the bureau said only licensed auto importers and primary car dealerships may store, display, and sell vehicles on registered commercial premises. Commission-based brokers and intermediary agents, it said, are limited to facilitating transactions between prospective buyers and sellers in exchange for an authorized service fee.
The bureau maintained that brokers who store and market third-party vehicles on private lots are effectively operating unlicensed car dealerships. The practice, it said, undermines market transparency and may result in lost tax revenue.
To ensure compliance, the bureau has ordered commission businesses to remove all unauthorized vehicles within the specified grace period. It warned that brokers who fail to comply could face measures under the Tax Administration Proclamation, including the sealing of commercial premises, fines, and legal action.
