Abstract:
This study analysis tax holiday Incentives under Ethiopian Investment Law in comparison with
Kenya Investment Law. The objective of the research is to analyze Ethiopian tax holiday
incentive package provided in Ethiopian investment laws in comparison with Kenyan tax
holiday incentive. The study adopts doctrinal comparative legal research that analyses the
relationship between the two countries tax holiday incentives. Even though the objectives of
tax holiday incentive are creating conductive environment for foreign private investors, tax
holiday incentives in Ethiopia investment law are questionable. The incentive packages are far
from achieving their objectives resulting in low social costs, including revenue losses for
government. The research suggests that Ethiopia should learn from Kenyan tax system, and
needs to critically analyze tax incentive environment, and introduce necessary changes in its
investment incentive packages especially tax holiday incentive. It recommended to creating
enabling conditions by focusing on infrastructure development and fundamental determinate
of incentive. It is not, however, to recommend that the government should move immediately
away from offering incentives; but to advocate that the incentive given on should gradually
mix some elements of performance-based incentives.
