Freight transporter associations and drivers face a four-month lifeline to transform into commercial entities or meet the consequences, which entail an embargo on crossing the Djibouti border.
The notice is a sequel to the decision put forth by Minister Alemu Sime (PhD) of Transport & Logistics in mid-August which was forewent following the pile-up of containers at Djibouti ports where over 90% of goods transit through 12,000 vehicles annually.
Despite the commercialisation of the transport sector being heralded as a transformative tool by the Ministry ever since the 2022 proclamation, the transition has been an uphill battle for the transporters who feel it has been rushed and fails to take into account the nature of their business.
The plight was aggravated when associations who had changed to commercial entities were required to formally register every freight they rent through an authentication process that would result in unprecedented tax obligations.
The former manager of the 250-vehicle-strong Bez Cross Border Freight Services, Samuel Ayalew, is one of the few transporters who has managed to successfully transition.
As an owner of four Sino trucks, Samuel opted to make the change confident that he could manage the operational expenses. He went through the rigorous process of receiving a competency assurance certificate, renting an office and hiring management.
“I can cover my costs,” he noted. “But not everyone can.”
Samuel indicated transporters with a couple of vehicles or less will have great difficulty in making the change due to operational costs that cannot be covered by providing limited services.
He explains that the stipulation that requires all vehicles to either be owned or rented for use by a commercial entity is inconsiderate of Value Added Tax (VAT) obligations that they will be liable to or the difficulty in determining journey durations and fees.
He believes the adamant decision seems to be defragmenting the associations rather than improving service while the reluctance he observes to understand the nature of the business frustrates him.
“They won’t even listen,” he said.
An agreement that is approved by the Document Authentication Agency stating duration and payments along with the change of transport license into a rental will be required of any of the commercial entities that seek to use other cars to provide services besides their own.
Source: Addis Fortune
