Ethiopia Rolls Out Tax Relief Measures to Strengthen Free Trade Zone Uptake

Addis Ababa, April 13, 2026 (FMC) — Ethiopia’s Ministry of Finance has announced that investors operating in free trade zones and engaged in the marketing of inputs and finished products will be exempted from income tax.

In an official communication addressed to the Ministry of Revenues (MoR) and the Ethiopian Investment Commission (EIC), the Ministry stated that the government is implementing a range of measures aimed at easing structural constraints hindering domestic industrial growth, including capital shortages, limited access to inputs, and skills gaps.

As part of these efforts, Ethiopia has introduced a free trade zone framework designed to facilitate business operations by allowing investors to import inputs and goods without immediate payment of taxes and duties. Under this system, taxes are deferred until the imported inputs or products are supplied to the market.

Building on this framework, the Ministry emphasized that the newly introduced income tax exemption is intended to further enhance the attractiveness of free trade zones and encourage greater private sector participation, particularly among investors involved in the supply and distribution of industrial inputs and products.

The Ministry of Finance also called on investors to take advantage of the policy incentives and explore investment opportunities within Ethiopia’s free trade zones.