Hotels with a four stars and above will be eligible to have duty free shops at their premises, once the new customs regulation is implemented. The regulation has already been approved and is being printed for distribution.
Hilton, which the government partially owns, and the state-owned Ghion Hotel are the only ones with a duty free shop available on their premises. Run by the state owned Ethiopian Tourist Trading Enterprise, these shops used to be the go-to place for the diplomatic community to procure different items.
The regulation will be the first of its kind with details on how duty free shops should be run in the country. It also gives access to the private sector to engage in the business in places outside airports. Privately run duty free shops are only available at Addis Ababa Bole International Airport.
With the regulation already approved and to be made operational soon, anyone with an import license, a 10 million birr capital and a customs licensed duty free warehouse will be eligible to own a duty free shop.
Decisions on how duty free shops should be opened used to be made in letters for a lack of regulations on the matter, according to Mulugeta Beyene, deputy commissioner for legal compliance sector at the Customs Commission.
“The customs regulation brings access to the private sector with qualifications,” said Mulugeta.
The shops would be allowed in places such as international airports, limited customs checkpoints, African Union Headquarters, Economic Commission for Africa, four and above stared hotels, and other places the Ministry of Revenue might decide on, according to the regulation.
The Enterprise has been unilaterally running duty free shops at all the places in the city outside the airport. Implementation of the regulation will end the Enterprises’ dominance.
“There are people such as diplomats with the privileges, but they are limited to a number of items based on the quota administered by the Ministry of Foreign Affairs,” Mulugeta said explaining the need to expand reachability of the shops.
The government plans to collect the forex in addition to availing items to the diplomatic community, as all items are to be sold in foreign currencies.
Any incoming and outgoing passengers as well as transit passengers will have the permit to buy items at the duty free shops available only in the airport. However, only diplomats and international organization personnel with the specific privilege will be permitted to buy items at the shops outside airports, according to the regulation.
Alcoholic beverages, household items, electronics, packed food & drinks, clothes, souvenirs, perfumes, and several other items will be sold at the shops, as listed in the regulation.
Aster Solomon, chairperson of Addis Ababa Hotel Owners Association and owner of Mosaic Hotel, welcomes the new development for the variety of service options it would provide hotels. Opening up duty free shops in hotels would enable them provide services A-Z, according to Aster.
“It is a good beginning now but I expect the government to implement it at least at three stared hotels as well since they also have a high number of guests paying in foreign currencies,” Aster said.
The Customs Commission will have strong controlling mechanisms such as applying duty free stickers on the items to make those using it illegally accountable at the time of inspection.
The shops will also be liable to a series follow-ups from inspection teams at the Commission to check how, when and who they have sold the items to. Sales and other documents will also be cross-checked, according to Mulugeta.