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Areas
of investment
Eligible for profit tax
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Conditions
for
Profit tax eligibility
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Profit
tax Exemption
(Years)
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1
2 |
An investor engaged in
a new manufacturing or
Agro –industry activity
Expansion or upgrading
of the above projects
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a) at least 50% of its production is
to be exported.
b) If at least 75% of its production will be an input for the production
of export items.
c) If the project is valuated under a special circumstance by the
BOI.
d) If less than 50% of the production is is to be exported.
e) If the production is for local Market.
f) If the production above on (d) is is considered by the BOI to
be a Special one.
If the expansion or upgrading increases the existing production
by 25% in value & 50% of the production is to be exported.
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5(Five)
5(Five)
Not longer
Than seven
2(Two)
2(Two)
5(Five)
2(Two)
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| Moreover, the council of ministers
may also award profit tax holiday for greater than seven years.
3. Loss carried forward
• Business enterprises that suffer 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.
- The promulgation of amended urban and rural land lease policies,
whose prime objective is to encourage private investment. Some
of the provisions:
o For selected and strategic projects land is provided freely
and for some others at a lower negotiable price.
Type of projects to be given free from land lease rent
- Production of Nursery
- Production of rubber and balsam
- Production of Incense and resin
- Production of commercial forest
- Live stock Production and preserving of meat, and meat products
- Dairy farming and processing
- Poultry Farming And Processing
- Manufacture of pesticides and other agro –chemicals and
products (must include bulk preparation)
- Manufacture of pharmaceuticals, medical chemicals, and botanical
products
- Manufacture of glass and glass products
- Production, processing and preserving of fruits and vegetables
- Manufacturing of Prepared animal feed
- Manufacture of wines
- Tannery and Dressing of leather
- Processing and preserving of fruits and vegetables
- Distilling, rectifing, blending of sprits; ethyl alcohol production
from fermented materials
- Manufacture of wearing apparel; except fur apparel
- Manufacture of Leather products and articles
- Manufacture of Leather footwear
- Manufacture of electric motors, generators and transformers
- Manufacture of electricity distribution and control apparatus
- Manufacture of electronic valves and tubes and other electronic
components
For the last five projects land can also be provided in the industrial
zone, but will have to pay the land lease rate of 0.30 to 0.75 Birr
per square meter, per year
- For agricultural projects the current land rent ranges from
30-40 birr per hectare and will not be revised for the coming
10 years. Thereafter it may be revised every 5 years but the increment
of rent will not exceed 20%.
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