The industrial zone incentive scheme in Ethiopia

The industrial zone incentive scheme

Industrial zone means an area set aside for industry which is equipped with the necessary infrastructural facilities and enjoys policy incentives.

Beneficiaries of the industrial zone scheme shall be industries setup within an industrial zone and which meet the criteria of eligibility set by the Ministry of Industry.

Currently, the Ethiopia government implements the following export trade incentive schemes.

These are;

a) The duty draw-back scheme;

b) The voucher scheme;

c) The bonded export factory scheme;  

d) The bonded manufacturing warehouse scheme;

e) The bonded input supplies warehouse scheme; and

f) The industrial zone scheme.

In this article we will see the six scheme, the industrial zone scheme

Procedures for the application of the scheme are the following;

These are;

First, raw materials imported by a person who is beneficiary of the industrial zone scheme shall be transported from a customs post to the factory under the control of customs without being subject to payment of duty.

Then, the Ethiopian Customs Commission shall inspect raw materials brought into an industrial zone and goods produced by industries within the zone for export and local consumption.

Raw materials imported under the industrial zone scheme must be put to use in the production of commodities for export or local consumption within one year of receipt of such raw materials by an industry within the zone.

 A person who is beneficiary of the industrial zone scheme shall:

  1. Assort its products by their destination and report same to the Ethiopian Revenues and Customs Authority; and
  2. Present to the Ethiopian Customs Commission, evidence that shows the commodities destined for export have been exported within one month from the date of leaving the industrial zone.

Then, the Ethiopian Revenues and Customs Authority shall charge duty on commodities destined for local consumption on the basis of all industry rates before such commodities leave the industrial zone.

Where a beneficiary of the industrial zone scheme applies for extension of the period, Ethiopian Customs Commission may, by taking into consideration the nature of the raw material, extend the period for not more than one year.

A beneficiary of the industrial zone scheme who has not secured permission for extension shall, in addition to the duty payable on the unused amount of the raw material, be required to pay 50% of the duty.

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