The industrial zone incentive scheme in Ethiopia
The industrial zone incentive scheme
Amount the duty free incentive schemes provided for those who participate in export trade the last incentive is the the industrial zone incentive scheme.
Industrial zone is 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.
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.
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 both 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:
- Assort its products by their destination and report same to the Ethiopian customs commission; and
- Present to the 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 customs commission 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 pay the duty payable on the unused amount of the raw material and be required to pay 50% of the duty.
