Ethiopia has been imposing an excise tax on goods that are believed to be hazardous to health and cause social problems in an attempt to reduce consumption of such goods.
In a recent statement released by the Ethiopian Revenues and Customs Authority, it was reported that in a bid to collect an additional over 1 billion dollar annually the government is set to introduce an excise tax on more goods. The list of the goods the new excise tax will be implemented on has not been announced yet.
Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. In Ethiopia, an excise tax is imposed and payable on selected goods, such as, luxury goods and basic goods which are demand inelastic.
According to the Ethiopian Revenues and Customs Authority, excise taxes will help the country generate better revenue and will greatly contribute to the economy he said adding the money will be used to enhance the development of various sectors, including education, health, and agriculture.