The Cheapest SUV in 2023
When searching for the cheapest car/SUV to buy in 2023 on Google, the first option that comes up is the 2023 Hyundai Venue. It is priced at nearly 20,000 USD which would convert to 1.1 million ETB using the official exchange rate. However, this price increases by 77% to 1.9 million ETB when import taxes are added. The price of the car can reach up to 2.5 million ETB or more if you consider other costs including dealer margins. This makes it no longer the cheapest car for those living in Ethiopia.
Cost of Suziki Dzire in Ethiopia
One of the popular choices in Ethiopia is the Suziki Dzire. Let us see how the price of a Suzuki Dzire would change when considering import taxes.
The factory price of a CBU Suziki Dzire, without considering Freight and Insurance costs is 8,000 USD (equivalent to 432,000 ETB when converted using official FX rates). This price would increase to 767,934 ETB when imported into Ethiopia due to five types import taxes, resulting in a 78% increase in costs.
Tax Calculations
- The first tax we should consider is Customs Duty: Imported motor vehicles could be in the form of Completely Built-Up Unit (CBU), Semi-Knocked Down (SKD) and Completely Knocked Down (CKD). Tax rates also varies based on the form they are imported and whether they are Diesel, EV or Hybrid cars. Custom duty will also vary based on the engine size.
Description
Amount
Remark
COST
432,000.00
Customs Duty (25%)
108,000.00
Since Suziki Dzire is a diesel
car with <1500 cc, the duty becomes 25%Cost + Customs Duty
540,000.00
- The second tax is Excise Tax: Based on the revised Excise tax proclamation and issued regulation the following excise tax will be levied at the time you import cars from abroad. This tax would add an additional 54,000 ETB on our purchase cost of a Suziki Dzire, bringing the total to 594,000 ETB.
Description
Amount
Remark
COST
432,000.00
Customs Duty (25%)
108,000.00
Since Suziki Dzire is a diesel
car with <1500 cc, the duty becomes 25%Cost + Customs Duty
540,000.00
Excise Tax
54,000.00
Our assumption: New Car with <1500 cc. Excise tax for
new cars – 10%Cost + CD + Excise Tax
594,000.00
- Other Fixed Taxes: In addition to the above taxes, 3 fixed taxes will be levied on our import, namely (VAT (15%), Sur Tax (10%) and WHT (3% on original invoice price).
Description
Amount
Remark
Cost + CD + Excise Tax
594,000.00
VAT (15%)
89,100.00
Fixed Tax
Cost + CD + ED + VAT
683,100.00
Sur Tax (10%)
68,310.00
Fixed Tax
Cost + CD + ED + VAT + Sur Tax
751,410.00
WHT (3%)
12,960.00
Fixed Tax
Scanning Fee at Customs (0.7%)
3,024.00
Total Cost
767,394.00
Total Cost increased by 78%
Considering dealer margins and other costs, the total cost of purchasing a Suziki Dzire goes up to 2 million ETB, which is a 363% increase in costs. To note, the calculations used the official foreign exchange rates. If parallel market exchange rates were used, the costs would increase from 880,000 ETB to 1.6 million ETB and then to 2 million ETB.