The Ministry of Finance has issued a new directive allowing investors operating in free trade zones to benefit from income tax exemptions on earnings generated from imported goods they sell.
The decision, addressed to the Ministry of Revenue and the Ethiopian Investment Commission, is grounded in Article 12(1) of Council of Ministers Regulation No. 586/2018 on Tax and Investment Incentives.
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The provision empowers the Ministry of Finance to extend incentives beyond the sectors explicitly listed in the regulation, provided there is sufficient economic justification.
According to the Ministry, the move is aimed at strengthening the role of import-focused investors within free trade zones. These investors are seen as critical to ensuring a stable supply of inputs and preventing disruptions in production and service delivery for manufacturers and other businesses operating in the zones.
By exempting such investors from income tax on their trading activities, the government intends to improve efficiency across supply chains, enhance the competitiveness of industrial operations, and support broader investment objectives.
The directive has also been copied to the Industrial Parks Development Corporation, along with relevant departments within the Ministry of Finance for implementation and oversight.
Officials have called for immediate execution of the measure, signaling the government’s continued push to refine Ethiopia’s investment incentive framework in support of industrial growth.
