Are cars a luxury?: How Ethiopia is taxing vehicles off the road – BBC

ethiopian-car-seller
Owning a car for many Ethiopians – even those with ready cash to spend in one of the world’s fastest-growing economies – remains a pipe dream.

“I have been saving for nearly four years now, and I still can’t afford to buy even the cheapest vehicle here,” a frustrated Girma Desalegn tells me.

He has been shopping around for a whole week in capital, Addis Ababa, and has still not found an affordable car.

He is looking to buy a second-hand car imported from the Gulf states or Europe – but even they are prohibitively expensive because the government classifies cars as luxury goods.

This means even if a vehicle is second hand, it will be hit with import taxes of up to 300%.

“I have a budget of $15,000 (£12,300) and had expected that with that I could buy a decent family car.

“I don’t want to buy the Toyota Vitz,” he says pointing to a row of small hatchbacks that have now become popular on Ethiopian roads.

These cost about $16,000 in Ethiopia; in neighbouring Kenya the same car costs not more than $8,000.

It seems little wonder that Ethiopia has the world’s lowest rate of car ownership, with only two cars per 1,000 inhabitants, according to a 2014 Deloitte report.

Read more at the BBC

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