A new regulation approved by the Council of Ministers will see vehicle licence renewal fees collected across the country starting from the 2015/16 fiscal year.
The Road Fund Establishment Proclamation No. 66/1997 sanctions the right to collect payment from vehicle licence renewal as one of the fundraising methods, with the establishment of a road fund in addition to the road maintenance fuel levy and the overloading fine.
The Ethiopian Road Fund Office, in concert with the Federal Transport Authority (FTA), announced the regulation at a press conference held at the Ghion Hotel on June 4, 2015, although the regulation was approved by the Council of Ministers on February 23, 2015. The Road Fund serves as a financial platform for road maintenance and road safety measures in Ethiopia.
The new regulation, known as Axle Load Based Annual Vehicle’s Licence Renewal Fee, will be levied annually on any vehicle on the basis of its loading capacity or on the number of seats it has. This is in keeping with the payment schedule declared under the regulation, according to Reshid Mohammed, director of the Ethiopian Road Fund Office.
Vehicles with up to five seats will be charged an annual fee of 125 Br, while mini buses used as taxis, with up to 12 seats will pay 150 Br annually. Higer buses, with 27 seats will be charged 200 Br.
While the minimum fee is 125 Br, there is a maximum fee of 800 Br for vehicles with over 44 seats. The renewal fee for freight trucks starts from 300 Br for vehicles with a loading capacity of 15qt, while those with capacities of 180qt will pay 2,500 Br.
A minimum 750 Br fee is levied on fuel or liquid loading trucks with up to 10,000lt (long ton) loading capacity with the maximum fee reaching 2,000 Br for above 14,000lt loading capacity. Motorcycles and off-road operating vehicles will also make an annual payment of 50 Br and 300 Br, respectively.
The vehicle licence fee is a good initiative to support road maintenance, but should be clearly stated and publicised in order to promote transparency and encourage payers, said Getachew Tesfaye, manager of Noah Transport S.C. The company, established in 1997, manages 61 freight trucks with a loading capacity of 400qt.
In the coming year, the Road Fund Office is expected to collect a total amount up to 150 million Br from vehicle’s license renewal fee, according to Reshid. The amount is calculated based on the number of currently registered vehicles, which are 581,031 in number.
In the last 10 months, the Office had planned to collect around 1.8 billion Br, which it exceeded by collecting 1.9 billion Br. Most of the money, which is some 1.7 billion Br, was collected from road maintenance fuel levies, with the rest coming from such sources as tariffs on lubricants and overloading fines.
The money generated is not sufficient to carry out quality and full road maintenance across the country. This needs a 2.6 billion Br budget, said Reshid. Therefore, the main objective to levy this licence renewal fee is to contribute as much for the budget gap, he added.
The 10-month period also saw the maintenance of 15,329Km roads from 17,724Km roads that were planned.
The Federal Transport Authority will oversee the collection of the license renewal fee, which will be collected along with the annual technical inspection and registration, said Kassahun Hailemariam, director general of the Federal Transport Authority.
The total sum of money deposited to Ethiopian Road Fund’s Office is distributed among 71 road agencies across the country. Sixty five percent of the total fund is disbursed to Ethiopian Roads Authority while regional rural roads authorities get 25pc from the fund and the rest is distributed among city’s roads agencies.