Ethiopian News Today: Due to Ethiopia’s high industrial taxes, factories were forced to shut.

Ethiopian News Today: Due to Ethiopia’s High Industrial Taxes, Factories Were Forced to Shut.

Industrial owners announced that they were forced to close their factories partially or completely due to the high taxes imposed by the government. The industrial owners said this at a discussion forum held last week by the Addis Ababa City Administration’s Business Enterprise and Industry Development Office with private investors and manufacturing industries.

They said that spare parts that were imported duty-free from China three years ago are now considered luxury goods and have to pay 200 to 300 percent duty. The investors have announced that industries that can create many job opportunities are being closed and their workers are being laid off. In addition to the dollar shortage, excessive tax payments and other fundamental problems have been cited as reasons for closing factories and laying off workers. “We were forced to close three of our four factories because we were charged an excessive tax on the spare parts we import through customs,” said Sisay Eshete, manager of Farike Factory Private Limited Company.

He stated that 560 machines stopped working due to a lack of spare parts, and 220 machines that could work also stopped working due to a lack of supply. “We have gone a long way to fulfill the requirements for 560 machines that have lost spare parts but can be serviced when they get spare parts so that their spare parts can be imported duty-free, but we have not received a response,” he said. “If the government does not pay attention to the issue and find a solution, it will cost us as a country,” he said. They explained.

Ato Sisay stated that 900 workers were laid off due to the closure of three of the four different factories, while 150 workers were employed in one factory. They said that they have received suggestions that the Chinese who have entered the Ethiopian market will import duty-free raw materials and import and sell clothes sewn by pretending to be a thread. “Besides not paying what they have to pay to the country, they are putting a lot of pressure on our market because the goods they provide are not up to standard,” he said. “Instead of foreign investors importing yarn and sewing clothes, if they import machines that can produce accessories, we can work without any dollars,” he explained.

During the discussion, another investor shared Mr. Sisay’s sentiments. “Our steel manufacturing company is not working due to the market instability,” he said. “From 2010 The activity which has been slowing since then, for the past two or three years, the problem has worsened and we were forced to stop working,” he explained. “Even though the problem is national, the city administration should pay attention to the factories that create jobs for many people, but we are finding it very difficult to get various services, starting from giving them a place to work,” they complained. “When we made a move to create job opportunities by constructing a shed on a large piece of land in our company, we were unable to get a satisfactory response from the licensing authorities for various reasons,” explained the investor. He said, “Since the present time is difficult, the reasons given by the city administration should not create more problems on top of the existing problem.”

He added that due to the closure of manufacturing industries, even in various private and public financial institutions, citizens are being told to pay one to two hundred thousand birr to get a job. “In a situation where there are many problems, it is not a solution for the city administration to say that it should be done this way. Instead, we should work together to create a comfortable working environment and create a lasting solution,” the investor concluded.

In addition to the shortage of foreign currency, excessive tax payment, and related questions, other participants have complained in the forum that infrastructure such as electricity and water have been cut off, resulting in additional expenses. “Let’s call on you to create more manpower and discuss. It is very difficult to hear that we have closed industries and dispersed workers because problems were not solved properly,” said Jantarar Abai, Deputy Mayor of Addis Ababa City Administration and Head of the Employment and Enterprise Industry Development Bureau. “If we say that it is the manufacturing industry that creates wide employment opportunities, the question of how many factories can solve their problems and produce should be raised together,” he said. “The origin of the questions is that we have not reached the level where the government is responsible for creating an agreement that allows the industry to bring in foreign currency,” he added.

Mr. Jantarar said that the location and related questions raised by the investors should be resolved by protecting the legal process. “It is not the only company that is going bankrupt when they cut 150 out of 1,050 employees and dispersed 900 employees. As a country, it is very scary,” he explained. Jantarar said that if the participation of private investors and institutions does not increase, it will be difficult to solve the current unemployment problem.

Ato Jantarar said that although the government has planned to reduce the unemployment rate from 18 and 17 percent to 9 and 8 percent by strengthening the capacity of manufacturing industries in the past ten years, due to various reasons, the unemployment rate has increased from 19.2 percent to 22.8 percent.

According to the data released by the Ethiopian Statistical Service Agency, 80 percent of the 22.8 percent of those registered as unemployed have less than a 12th-grade education and are not interested in work. According to the deputy mayor, the increase in unemployment in the city is due to the migration from the countryside to the city. He said that in addition to the high number of unemployment that is currently observed, when the number of people migrating from the countryside is added, it is a great help to the capital city. He pointed out that to alleviate the problem, the city administration is creating job opportunities only for those who have ID cards the residents of Addis Ababa. He explained that he is recruiting and training about 90,000 unemployed youth in one area so far.

He said that efforts will be made to solve problems in private industries and reopen factories that have stopped working due to various reasons, and return workers to their previous jobs.

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