Does anyone know a website listing used cars?

And to top it all, I found the following info on http://www.erca.gov.et/taxcalclient.php:

DPV = Cost + Insurance + Freight


DPV X CUDU = A
(DPV + A) X EXTA = B
(DPV + A + B ) X VAT = C
(DPV + A + B + C) X SURTAX = D
DPV X WHT = E
---------------------------------------
TOTAL PAYABLE = A+B+C+D+E
Where DPV= Duty paying value
CUDU= customs duty rate (is: 35% for a car with HS Code 87033390 (Diesel more than 3000ccm)
EXTA = excise tax rate (100%)
VAT = value added tax rate (15%)
SURTAX=surtax (10%)
WHT = with-holding tax rate (3%)
All data from the tariff book. http://www.erca.gov.et/download.php

Example:
Say a car costs 27.000 EUR (618.000 Birr)
Transport from Europe will cost around 3500 EUR (80.000 Birr)
DPV 30.500 EUR = 700.000 Birr

DPV X CUDU = A
700.000 x 35% = 245.000

(DPV + A) X EXTA = B
(700.000 + 245.000) x 100% = 945.000

(DPV + A + B ) X VAT = C
(700.000 + 245.000 + 945.000) x 15% = 283.500

(DPV + A + B + C) X SURTAX = D
(700.000 + 245.000 + 945.000 + 283.500) x 10% = 217.350

DPV X WHT = E
700.000 x 3% = 21.000

TOTAL PAYABLE = A+B+C+D+E
245.000 + 945.000 + 283.500 + 217.350 + 21.000 = 1.711.850 Birr

1.711 Million Birr (= 74.720 EUR) of tax for a 27.000 EUR car????? That's a whopping 276%

So that would mean that the car won't cost me 27.000 but more than 100.000 EUR !
Come on, that just CAN'T be true?!
Anyone?

Welcome on board Y61

Wow, you message is very technical! And I hope that other members will be able to comment on this soon.

Regards

Dear Yud,

well I actually don't think that it is technical at all. It's just a very practical question anyone who plans to live/work in Ethiopia for a while while have sooner or later...

I move a lot and I have some routine in preparing my stay in the next country. Organizing a car is always one of the most important things as you can't do anything without it. Also, it is the topic with the biggest pitfalls and it always involves a lot of money. So it needs to be prepared thoroughly or you can have nasty surprises (such as paying 74.000 Euro tax and duty)

But apart from what you call a technical issue - is there a (dealer's) website with more than 3 stone age old cars on sale?

Dear Josh, my collegue at german embassy school want to sell his car, because they are leaving this summer to germany. Nissan 4WD, price around 18000 euro + vat. The Car is 7 years old and was imported by tax free status.
If you are interested I can forward your mailadress.
Regards
Thorsten

Hi there! Here's a car dealership website you can try:
delalaonline.com/Vehicle%20Buy%20List.html

You can also contact the owner of the website (who is a friend) for your queries regarding car import taxes. I wouldn't be surprised if you had to pay more than 200% of the original car price.

Bonne chance!

Hi Alexanv,
thanks for the link! Really useful to get a first impression.
And thanks Thorsten, but I'm not yet in ET and I'm still browsing & comparing... also, I'd have to pay the duty as you wrote that the car was imported tax free...
Best, Josh

Y61,  no surprise..now you know.....the money gotten this way and other ways that you can't imagine from you and 99.99% Ethios goes to 1% of .... The mansions worth of billions of dollars or Euros built in Europe, America, Sweden etc., money stashed so far away from Addis for personal wealth building/getaways, luxury shopping, real big big items-----go figure.  At the same time, the poor 99.99% Ethios suffer with poverty, teachers, civil servants ext. can't afford to buy food for their families.

Anyways, I am guessing that buying a vehicle right from Addis will not snatch away your wallet as much as importing it.

Well folks, to give an answer to my own question:

I found precise information on what one has to pay:
My above calculations were right correct for a car with more than 1300 ccm.
As described, the taxes which you'll have to pay is the sum of 5 different taxes, only one of which (the Excise Tax) varies depending on the engine displacement (calculated in 3 steps)
Cars from 0-1299ccm attract a Excise Tax of 30%
from 1300ccm to 1799 ccm -> 60%
everything above 1800ccm -> 100%

The way how to calculate it stays the same:
DPV = Cost + Insurance + Freight



DPV X CUDU = A 

(DPV + A) X EXTA = B

(DPV + A + B ) X VAT = C

(DPV + A + B + C) X SURTAX = D 

DPV X WHT = E


--------------------------------------- 

TOTAL PAYABLE = A+B+C+D+E


Where
DPV= Duty paying value

CUDU= customs duty rate (car: 36%)
EXTA = excise tax rate (30% or 60% or 100% depending from engine displacement, see above)

VAT = value added tax rate (15%)

SURTAX=surtax (10%)

WHT = with-holding tax rate (3%)

That means that in MOST cases, even considering the enormous prices for used cars in Ethiopia, it will still be cheaper to by it there.

Example:
A medium used car, 2000ccm, bought for 5000$ abroad, purchasing prize plus transport and insurance adding up to 10.000$ (=DPV), will cost you 34.455 USD in total (purchasing prize plus transport plus insurance plus taxes).
That is 590% added cost to the initial purchasing prize !

A small used car, 1200ccm, same purchasing prize of 5000$, and a total DPV of 10.000, will cost you in the end 22.500 USD. That is still 350% additional costs to add to the purchasing price.

From what I saw on:
delalaonline.com/Vehicle%20Buy%20List.html
it seems that it is true that one is better off buying a used car in Ethiopia instead of importing it.

It is an undisputed and universal truth that mobility stimulates economic growth. Always has, always will be. Look where big, rich, successful cities are situated: where transport ways cross.

It's one thing that lots of people couldn't afford a car in any case but to hamper personal mobility and thus economic activity is not easy to understand, especially not in countries that could use some more economic growth...

One more thing you forgot to mention. The tax authorities make their own estimations of the price you paid to buy the used car (which often ends up being much more than what you actually paid for the purchase). They rarely accept receipts as they want to prevent undervaluation of the purchase price for tax purposes. In any case, you'll end up paying whichever of the two prices(their estimation or your receipt) is the highest.    

So in your example above, you need to take that into account. You may have purchased your car at 5,000$ but they might estimate it at 6 or even 7,000$. I'll let you figure out the taxes

It's getting worse and worse... thanks for that enormously important input!

Has anyone ever heard anything about these ethiopian-chinese cars "Holland Car"?

Taxes are this high in order to save foreign currency (which you would have needed to import the car itself, including spare parts) and possibly to stimulate local car production and create jobs.

Some companies have established car assembly plants in Ethiopia.
Holland Car first collaborated with a chinese company (Lifan Motors), but they both went their separate ways last year. Both have their own lines today.

Brand new Lifan 4-door sedans cost only 260,000 birr (about 15,000$). The company's official website is:   http://iecauto.lifan.com/enauto/news.asp?docid=171

Holland Car has also attractive models at affordable prices. It is currently cooperating with another Chinese company. See the official website:
http://www.holland-car.com/

I've heard that one of these companies has a waiting list of over one year to buy their cars, but i'm not sure which one.

To read about the split between Holland Car and Lifan, read this article:
http://allafrica.com/stories/201001190652.html

Ok, I already read about it. But is it any good?
Do you know someone who drove it?
How about reliability - not exactly one of Chinese manufacturers virtues...

And of course this argument had to come: high duties protect the local market and create jobs;

I can partly agree in cases where the customer has a choice between local products and foreign products, but, apart from some terrible chinese cars which are only since recently available, there just isn't any choice.
Most people would be happy to pay some hundred $$ for a used foreign car instead of paying ten times that for a new chinese car. Many how could afford a 300$ car can only dream of buying a new car even if it only costs 10.000USD. This person is deprived of a lot, and his economic activity is less then it could be.

A mobile population is much more useful for the overall economy by being more productive, paying taxes for fuel, tires, registration, insurance, workshops, etc etc.

It is cynic to argue that some hundred or even maybe one or two thousand jobs are created and that this would result in so and so many millions of dollars income, when depriving most parts of the population from the opportunity of buying a still reasonable used car for 200$ and, like this, not only improve their live but also add to a much more important source of income of the country: think of how many thousand workshops you have, filling stations, insurance firms, tire shops, not to mention less migration into bigger cities because of higher mobility. This adds up to a much higher number. And if you want to boost local car production, then use some of this money to support them financially with what you earned by opening the market.
Also, it is an economic law that quality is a direct result of a challenging market. Look what kind of cars were produced in the former USSR and compare their quality with what is produced now.

I personally haven't driven these cars, but two of my friends have bought different models. One bought a DOCC (the first model of Holland Cars, no longer available) about 2 years ago ... the car may not be very attractive aesthetically but he told me that there were no major problems he encountered other than the lack of some spare parts (due to lack of foreign currency)! The other friend just bought a Lifan 520 last January, so no problems yet. These cars have not been on the road that long so it might be too soon to identify major technical problems. If I were living there, I would also probably end up buying one of those cars.

Otherwise, we don't disagree too much on the "high duties [don't]protect the local market and create jobs" discussion. No one is questioning the benefits of mobility on the local economy. As a consumer, i would have liked to have the choice to buy used cars of good quality and pay a reasonable tax. Competition is also healthy for the economy, no doubt.

But I wouldn't want the country to be a dumping ground for used foreign cars. Not just for long-term economic reasons, but also for environmental ones. Today, most of the cars you find in the streets in Ethiopia were manufactured at least 20 years ago ... these gas guzzlers pollute the environment, as you'll soon see for yourself.

And to be frank, I don't see the reason why a 2nd-hand owner of brand cars in a developing country such as Ethiopia should be tied to importing spare parts from the developed world. The big brand auto industries are (understandably) very protective of sharing their technology to the rest of the world in such a way that the average poor country can in no way produce the replacement parts locally (not only due to lack of know-how but because of property rights). This, for me, is giving the consumer no option. Not only will this mean taking away potential jobs from the poor country, but it will sustain the huge gap between the two worlds. There is nothing cynical about wanting to create jobs locally instead of financing the job of highly-paid workers in the developed world. And as you know, even a few thousand new jobs make a difference both to the workers and their extended families at large - why else would auto workers' trade unions in the developed world make headlines with their strikes.     

From an economic point of view, improving the quality and encouraging competition are useful at a later point in time, not 3 years after the first car assembly plant in the country starts production. The country can and should open up to competition after it has built up its own local capacity (human resource, technology, infrastructure...). I am not referring to Chinese cars assembled in Ethiopia here, but cars fully owned and manufactured locally in the near future.

Until then, the government should help local investors, by even temporarily subsidizing them. With over 80 million people in the country, local production should be encouraged and local market should be protected for a while. How else do you expect local companies to compete against auto giants like General Motors for instance - companies which incidentally received billion of $ as bailout from their governments.

Besides, it's not like there are no choices today. For the individual who can only afford a 300$ used-car, perhaps public transportation is the answer (both for economic and environmental reasons); developing public transportation is less expensive for the government also in the long-run. For the consumer who insists on quality, the person still has a choice today of paying 590% the original price in taxes      

To cut a long story short, the short-term economic gains from allowing used European/American/Japanese cars into the country at low taxes is not reason enough to forego more substantial long-term benefits for the country as a whole. As they say, 'Rome was not built in one day'. If the experience of emerging economies (China, India or the Asian tigers ...) is anything to go by, protecting local markets (and jobs) before opening up for competition is essential. Yes the pill is hard to swallow for us consumers, but it must be swallowed to bring positive and fundamental changes to the car market in Ethiopia.

Just my two cents 

Hello alexanv,

You explained very well... Brilliant contribution!

Dear all,
well, you see, this is a topic not only discussed here or only in this context, but globally and since decades.
It has far more side aspects than me or Alexanv could explain here. For sure Alexanv is, at least partially, right in what he describes. But, and this is a bit but!, each and every economic policy has its downsides. And when it comes to this, our, particular topic, I am convinced that the principle of commensurability is totally ignored.
The side effect of this policy is not to stop Ethiopia becoming a "dumping ground" for used cars of industrialized nations, but to deprive hundreds of thousands of people in developing their full economic potential. Transport, transport infrastructure and mobility is THE most important aspect of economic development. There is just simply no doubt about that. And THIS is where we seem to disagree. Yes, do everything necessary to boost your local car production, but do not do it in a way that your people bear the bitter consequences for decades and hamper national economic development which would be needed so desperately. And we are talking about decades, because this policy is neither new not will it stop in the near future as it is not realistic that the local car industry becomes a world market competitor in 5 years.

The environmental argument is weak as every 5-10 year old car has far least air polluting gases than 20 year old one. Also no doubt about that, right?
We could go on and on about that.
Thing is, that this is about opinions which policy is best, without a final universal truth. Just keep in mind that, while you cocker up one small private factory, not even a sector!, hundreds of thousands suffer under the consequences.

To wrap it up: we agree to disagree!
;-)