Searches to Begin for Illegally Transferred Duty-Free Cars

29 August 2006

The Ministry of Revenues will start surprise searches looking for vehicles that came into the country with a duty free privilege but have been sold to a third party.

An official from the Ministry told Fortune that the search will start on September 6, 2006. An enforcement force from the Ethiopian customs Authority and the Traffic police will do the search on the roads of Addis Abeba. The search will focus on duty free vehicles that entered the country and are now owned by a third party, as well as 144 vehicles which officials suspect of having entering the country on forged documents.

The directive issued in 2001, permitted Ethiopian returnees, diplomats, and students who are returning from their studies abroad as well as the physically disabled, without going abroad, to import vehicles and personal effects duty-free. The same directive includes a restriction on these vehicles, which could only be used by the owner and his immediate family and cannot be sold to a third party or be given as a gift. These vehicles cannot be used for business purposes.

If an owner wishes to sell one of these vehicles, duty will have to be paid for the ownership to be transferred legally. Out of the 10,269 such vehicles which entered the country between 2001 to mid-2005, more than 80pc were transferred to a third party illegally officials claim.

On July 24, 2006, the Ministry of Revenues lifted the duty free privileges for personal vehicles claiming that it has lost close to one billion Birr to abuses. During his press statement of July 26, 2006 Tezera Wodajo, state minister of the Ministry of Revenues, stated that the work force which was serving the people with duty free privileges will shift its focus to apprehending and controlling the defaulters. Following the lifting of the duty free privilege, the MoR gave the defaulters a chance to come forward and pay their. From the 8,000 vehicles not more than 10 owners came forward to pay the duty taxes before August 25, 2006.

The MoR made an announcement the evening of August 25, 2006, on the Ethiopian Television telling people who own duty free vehicles without a duty free entitlement to pay the duty tax before September 5, 2006.

Napoleon Kifle, head of the Civil Service reform office with the MoR told Fortune that this will be the last notification.

The MoR officials headed by Tezera Wodajo, had a meeting with Ethiopian Customs Authority officials on the same day, where the state minister ordered that the search and detention of the defaulters should commence from September 6, 2006. The search will be done by checking the license plates which in their records for duty free vehicles, so if drivers are not the entitled owners of the vehicle both the vehicle and the driver will be taken into police custody.

The Authority has also collected the names and addresses of individuals who have bought duty free vehicles without paying the duty tax and a house to house search will be done in parallel with the search on the roads.

The Authority will take all apprehended vehicles into its possession and issue criminal charges against the drivers which are found without the duty free entitlement.

The MoR is in dispute with people who got duty free privilege papers from the Ministry of Foreign Affairs recently and whose vehicles have not arrived yet.

Foreign Minister Seyoum Mesfin wrote a letter asking the MoR to revise and amend its directive with regard to diplomats returning back home after it took away the duty free privileges of the former diplomats that worked in missions abroad.

Similarly, the Ethiopian Shipping Lines (ESL) sent a letter to the MoR, asking to make its own administrative decision with regard to the vehicles which are going to be affected by the new directive.

The vehicles which are mentioned in the ESL letter have been waiting in different ports to be loaded onto its ships.

One legal expert told Fortune that “with a sensitive situation where the ministry is in conflict with both governmental organisations and individuals, it is an untimely move to do a search for the duty free cars.” Any individual person has the constitutional right to give or receive a power of attorney for his or her property to a third party and the Ethiopian Customs Authority will find itself in a difficult legal battle with anyone that defends their right to do so. Two years ago the Ethiopian Customs Authority apprehended 50 vehicles in similarcircumstances. It also had the plan to sell these vehicles and took people to court that were found driving them. In the end, the MoR decided that they could take the vehicles back after paying the duty tax. This expert does not see why the same thing will not be repeated this time around.

By ISSAYAS MEKURIA
FORTUNE STAFF WRITER