Ministry of Finance (MoF) issued a strong monitoring scheme for the implementation of excise tax collection. The Ministry of Revenue (MoR) has called out companies to fill the excise registration application form until mid next week.
The directive that was issued by MoF for the implementation of excise tax proclamation indicated that companies which produce products that should be included on excise tax levy will have to apply strong controlling mechanism including installing technological equipments on their production center and warehouse.
The excise tax proclamation 1186/2020 article 25 sub article 1 stated that Excisable goods stored in the factory of a licensed manufacturer shall be subject to the control of the Authority, in this case MoR.
Excisable goods shall be subject to excise control as from the removal of the goods from the factory of a licensed manufacturer for consumption in Ethiopia; until the goods are export from Ethiopia; or the destruction or disposal of goods as per the proclamation.
The article sub article 3 indicated that when goods are subject to excise control: an officer authorized by the Authority may, at any time, examine the goods. It said that no person shall, except with authority of the Authority granted in accordance with this Proclamation, remove the goods from a factory or otherwise interfere in any way with the goods.
Article 26 sub-article 2 of the proclamation says the Authority shall, by a directive, specify the requirements of a measuring or metering device and such other equipment as may be required.
The directive that was signed by Ahmed Shide, Minister of Finance, and issued mid October indicated details of the way to get a license.
The controlling and monitoring procedures have very detail specification. Factories should inform the tax authority before changing production process, adding storage place and adding new production lines.
The directive added that office, raw material and finished goods warehouses should be separated.
The installation of remote control device at the factory has also been stated as a mandatory, on the directive.
It added that the technologically supported device should show the activity in the factory, and added that the authority will issue details about the device and its specifications.
MoR have a right to access the remote control technological system that would have image archive and the technology shall be capable of transferring the images and other documents on digital systems.
According to the directive that contains27 pages and 41 articles, licensed factories shall be requested by MoR to follow a production scheme that is supported by an automatic system.
An industrialist told Capital that the directive gives more responsibility to the manufacturers on the controlling of the excise tax collection. He added that the implementation process mainly, the technologically supported devices, will have additional cost for the private sector, but he added that it may also support the industrialist to control his or her factory day to day activity.
Regarding labeling the directive stated that factories should have different labeling or sign for their products that may be produced for export, local market or duty free.
Based on the directive, MoR has called the manufacturers who are producing products that are supposed to collect excise tax to fill the registration application form till the deadline of December 9. It added that the licensing process may end on March 11. It announced that that those who do not receive the licenses until the stated period will not be allow to produce their products.
In related development MoR had put in place the 1160/2019 customs proclamation article 2 of sub article 13 (1 and 2), which was temporarily lifted in relation with the effect of coronavirus pandemic.
Article 2, sub article 13 too indicated that goods imported to Ethiopia by using air transport shall undergo the necessary customs formalities and be removed from the warehouse within 10 days from the day they are entered in the warehouse.
Similarly sub article one stated that for goods imported by using sea or land transport should be removed within 15 days.
While in relation with the effect of COVID 19, the enforcement had been relaxed since late March. According to the latest notice issued by Customs Commission, which is under MoR, the provisions of the proclamation has become reapplied as of Friday December 4.