Box 3: Ethiopia’s Export Incentives The Export Trade Duty Incentive: this scheme was introduced with the objective of improving foreign currency reserves by enhancing export trade and enabling exporters to access inputs at world market prices. Duty Draw-Back scheme, Voucher Scheme and Bonded manufacturing Warehouse Scheme Export Financing Incentive Scheme: This includes an export credit guarantee scheme, foreign exchange retention scheme, and foreign credit scheme. Investment Incentives: • 100% exemption from payment of import duties and other taxes levied on imports to an investor to import all investment capital goods, as well as spare parts up to 15% of the value of the imported investment capital goods • Exemption from sales and excise taxes for all export commodities • Exemption from Income tax: Investors engaged in manufacturing, agro-industrial activities, production of agricultural products will be exempted from income tax for a period of 2 to 7 years depending on the type of investment, volume of export, and the region where the investment is undertaken • Business enterprises that incur losses during the tax holiday period can carry forward such losses for half of the income tax exemption period following the expiry of the exemption period. Investment Financing Incentives: It is an initiative to provide credit facilities for new investment and expansion of ongoing projects. Other Conducive Environments for Export and Investment Development: In addition to the above schemes, Government has designed and created various conducive environments to accelerate the development of exports and investment in the country. They include the following: One-stop-shop service: to provide information required by investors, approve and issue investment permits, trade registration services, operating licenses, etc., to foreign investors. Infrastructure Development: Improvements in access to infrastructure has been given utmost emphasis. Access to land: New investors, or those who want to expand operations, can lease land, to be mostly facilitated by Regional States. Apart from this, various incentives have been given to investors based on regional investment priority areas. Public-Private Sector Partnership Forum: This forum exists to correct policy gaps and solve problems, develop future strategies based on best international practice, facilitate the three strategic industries: horticulture and floriculture, textile and garments, livestock and livestock products, and leather and leather products. Forum members include: producer exporters, representatives from NBE and other service rendering institutions, and Government officials at large. Source: World Bank Ethiopia Road Sector Development Project and Ethiopian Roads Authority. Compiled by the CRM, September 2009. 334 The institutional framework includes the Ethiopian Investment Agency (EIA) established with a strong mission to enhance both foreign and domestic investment by promoting national resource potential and investment opportunities, initiating policy implementation measures to create a conducive investment climate, and providing efficient services to investors to bring fast and sustainable economic development to the country. - 141 -