Two super League group “A” teams from Oromia are battling neck to neck to win Ethiopian Premier League promotion at the end of season. Sebeta Town leads the table a point clear of runner-up Legetafo Town while Ethio-Electric slips behind to watch the scenario.
Unbeaten side Sebeta Town threw away the four points lead after unexpected goal less away draw against Akaki-Kality. Famous for its strike force as well impenetrable defense line, Sebeta was expected to sustain the three points lead against humble side Akaki. But thanks to the vociferous support behind and the players determination Akaki managed a goal less home draw thus the promotion race once again on fire.
On the other hand, 9th place Wello-Kombolcha held till last but Dawit Kelemork’s final winning goal in the final minutes, gave Legetafo Town an important three points to close the gap to a single point. Following the win, Legetafo once again got the chance to stay close in the promotion race. Coach Kifle Boltena is promotion favorite for the big clash of the two will take place in Sebeta Town.
Eshetu Getahun’s second half goal short circuited Ethio-Electric’s dream to return to the Premier League after one season at Super League. 5th Gelan Town’s 1-0 home defeat meant a knocking blow to pin down Ethio-Electric to third place but nine points behind from top spot.
Bottom of the table yet trumpeting second round revival Amhara Water Works Construction (AWWC) defeated Woldya Town 2-0. AWWC’s huge effort is about taking over the two teams above; Burayu (16) and Axum (19) and things appear feasible considering its current form.
Super League group “A” promotion race on fire
Akaki-Kality promoted, Mekele-Seba almost there
A convincing 3-1 home win over visitors Kirkos Sub-City Akaki sub-city secured a promotion to the women’s upper league with two fixtures remaining. Mekele Town also made it to the top tier but only for mathematical probability.
Thanks to goals from Bezawit Negussie, Selamawit Gosaye and Aynalem Mekonen, Akaki’s remaining task is only about winning the title for they are only two points clear of second place Mekele. Eight wins, three draws and a single defeat, Akaki is on top of the eight side, two round, women’s lower league table with 27 points. Scoring 15 while conceding only four goals, Akaki managed an early promotion for it is eight points clear of third place Fasil Town.
With two fixtures to go Mekele Town sits second with 25 points from eight wins, one draw and three defeats. Hammering in 21 goals while conceding ten, Mekele that boasts the strongest strike force in the league is six points and seven goals clear of Fasil therefore it is only on a paper its promotion on hold. Fasil needs not only to win the remaining two games but also is under the obligation of scoring more than a dozen goals in its encounters. Shashemene (17), Kirkos (14), Bole (10), Nefas-Silk (9) and Ledeta (7) takes 4th to 6th spots while Ledetta dwells bottom of the table with only seven points.
It is surprising that the number of teams in the second division is less than the upper tier which brings together 12 sides.
Businesses pensive about excise tax
Some businesses owners are concerned that the expected excise tax revision, which has not yet been disclosed, will lead to economic slowdown and confusion.
The government is working to expand the tax base and improve the tax regime. One of the taxes under amendment is the excise tax that has been discussed in the past couple of weeks with stakeholders. Capital was able to look at the draft document. It appears that taxes on some goods will change and that new products will become eligible for the excise tax but details are not mentioned. Previously an excise tax ranging from 30 to 100 percent was applied to 19 categories of products.
Businesses that Capital talked believe that the increase and new products to be taxed should be disclosed by the government as soon as possible.
They said that the partly released draft document has given an opportunity for speculation, hearsay and confusion in the business world.
Since the information about the amendment came some businesses are waiting to see the final document and details of the categories before making decisions.
“For instance we prefer to keep still before giving any decision for the coming budget year,” a leader of one of the prominent manufacturing industry actors, who asked for anonymity told Capital. He said that the government has to clear the situation regarding the proclamation. “We, including industries in similar sectors, are concerned about the percentage increase in the excise tax. We must have a strategy for our future business, as a result the government has to release the full document and not hold the private sector in suspense,” another investor who also asked not to be named explained.
Experts said new businesses including FDIs prefer to see the upcoming amended law before making a decision about investing in the country.
There are rumours that the beer excise tax would be increased by 6 times from the current level. “Such kind of hearsay has affected the investment in the sector and others related to it,” they said.
The government has been encouraged by international partners like the World Bank and International Monetary Fund improve tax collection from the current 10 percent of the GDP at least up to peer countries in the region. In the Sub Sahara region, the average tax to GDP ratio is about 18 percent.
The government’s goal is that at the end of the GTP in 2019/20 budget year tax collection would increase to 17 percent of the GDP. It has also undertaken several reforms in the past few months and others are coming soon. The excise tax, which is expected to contribute about 9 percent of the total tax collection this year is one of the amended taxes.
For the current year the government plans to collect 10,366.3 billion birr and 8,738.1 billion birr from import goods and locally produced products respectively. The sum of two is about nine percent of the total targeted tax collection for the year, which is about 211 billion birr.
Recently Eyob Tekalegn, State Minister of Finance, said that the revision of excise tax law would enable the government to collect an additional 20 to 30 billion birr annually.
The Ministry of Finance is amending a proclamation that was originally introduced in 2002 and amended in 2008. It allows the Ministry of Revenue (MoR) to approve a license for companies engaged in business activity which would be expected to pay excise tax. At first it was unclear which companies would be subject to excise tax, commonly known as ‘sin’ taxes.
Excise taxation, which is one of the oldest indirect taxes imposed in the country, was first introduced in 1931, before the Italian occupation, on excisable products such as alcoholic beverages, cigarettes, incense, carpets and clothes.
According to experts, the amended draft document indicated that an ad valorem tax would be considered and manufacturing companies that paid tax on the raw material would be exempt and the calculation would be made on sales instead of production. However, the exemption or excise tax deduction does not include alcohol, tobacco and sugar products.
One of the new things that the draft proclamation added is revising the rate based on the market condition. Articles 10 states that the ministry shall adjust the tax ratio every two years and take inflation into account.
The new proclamation gives the ministry the power to identify what business is subject to excise tax. It said the ministry will approve those who want to engage in a business in which excise tax will be calculated, which is new. The draft has stated several criteria where they can prevent an entity from engaging in excise tax related businesses.
Sugary drinks, alcohol, tobacco, salt, petroleum, perfumes, textile, types of adornment like gold or silver, TVs and video cameras, some types of cars, carpets, asbestos, watches, and dolls are some of the products subject to excise tax.
Tax free agricultural equipment imports allowed
Ethiopia will permit the import of agricultural mechanization, irrigation and animal feed technologies, and equipment tax-free starting this week.
Eyob Tekalegine, State Minister of Finance wrote a letter to the Ethiopian Customs Commission listing a total of 45 agricultural mechanization, irrigation and animal feed technologies, and equipment items with their code numbers on May 6, 2019.
Some of the items include poultry tech equipment, honey processing machines, pesticides, surface or submersible generators and pumps used for irrigation.
The Agricultural Transformation Council Agency (ATA) and Agricultural Transformation Council in close collaboration with the Ministry of Agriculture and natural resources (MoA) initiated the tax reform policy by conducting systemic constraints of agricultural development, and recommended solutions in order to ensure sustainability and structural transformation and identified and listed the equipment to be imported tax-free.
“Farmers will have access to agricultural technologies which will ensure food security at the household and national level as well,” said Oumer Hussien Ministry of Agriculture.
The tax reform should enhance agriculture by removing duties and taxes on imports of farming machines, irrigation and drainage equipment as well as animal feed ingredients and technologies; thus providing incentives to invest in there importation and local production.
Policy makers and donor agencies in the agricultural sector have emphasized the use of modem farm technologies as a sole source of agricultural growth in Ethiopia. However, the cost of modern technologies is so prohibitive that few farmers in limited areas are using them.
Regarding the tax incentive, the government is giving attractive schemes for several local and international investors. In agriculture the government is providing tax and duty incentives but the number of investors is very limited and they contribute less than one percent to agriculture sector.
According to the information from Ministry of Agriculture, agriculture accounts for 34 percent of GDP and 71 percent of employment, including 12 million smallholder farmers.
The Minister of Agriculture and Natural Resources will have the mandate to license and supervise privileges, the letter reads.
“Allowing duty free for agriculture equipment by itself is not an end goal, access to adequate capital for agriculture is essential in addition to sharpening the structural barrier in the sector to achieve agricultural transformation and Millennium Development Goals and Sustainable Development Goals,” Demessie Chanyalew, an agricultural economist told Capital.
