The Ministry of Finance has announced that it will fully implement a 30% tax on petroleum products during the current 2018 fiscal year. The tax comprises a 15% value-added tax (VAT) and a 15% excise duty.

According to the ministry, this policy marks a significant shift in the country’s fiscal strategy and forms part of Ethiopia’s broader domestic economic reform agenda.

Presenting the national budget late last week, the Minister detailed the new tax measures scheduled for this fiscal year. In addition to the 30% combined VAT and excise duty on petroleum products, the budget also includes a property tax. Capital Newspaper has further learned that the government plans to introduce an alternative minimum tax and advance tax payments in the same period.

Given the central role of petroleum in Ethiopia’s economy, observers have cautioned that the tax increase could heighten inflationary pressures.