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BusinessGovernment lifts tax on food items

Government lifts tax on food items

In an effort to curb and control the rising inflation and enhance the purchasing capacity of the public, the government removed the tax levied on basic commodities such as wheat, edible oil, sugar and rice as of September 3, 2021.  

The Value Added Tax (VAT) that has been levied on items such as pasta, macaroni and eggs is also exempted. This was disclosed in a press conference held on Friday, September 3, 2021.

Eyob Tekalegn (PhD), State Minister of Finance, announced that food items have been exempted from tax and VAT.

According to the study conducted by the Ministry, the government will lose billions of birr due to the implementation of such impactful decisions, Eyob (PhD) underscored. 

Since tax exemptions alone cannot alleviate the inflation in the country, the government has already purchased sugar to cover the annual demand and 53 million liters of edible oil to be distributed for the public at a fair price, Eyob (PhD) highlighted.

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The new decision to exempt food items from tax and VAT is going to be implemented for unspecified period of time.

Eyob warned suppliers, wholesalers and retailers to refrain from unfair price increments and deliver the items accordingly.

The state minister also indicated that the decision passed by the Ministry has also been communicated to the Ethiopian Revenue and Customs Authority (ERCA) and the Ministry of Industry to implement the decision as of September 3, 2021.

Furthermore, Eyob (PhD) announced that the government will also introduce and implement other monetary policies to curb the rising inflation.

Contributed by Helen Tesfaye

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