market volumes, it is important to note that the government is also The approximated amount12 of excise tax evaded was roughly ETB3.0 rising to an estimated ETB10.5 billion during 2025 YTD. When adding the excise and VAT together, tax revenue losses amounted to an estimated ETB4.3 billion during 2020. This amount subsequently increased to ETB15.6 billion during 2025 YTD. Hence, the cumulative foregone excise revenue amounts to a substantial ETB27.7 billion during the 2020-25 YTD period. Adding VAT, the cumulative foregone tax revenue rises to ETB40.5 billion during the 2020-25 YTD period. This is equivalent to roughly 4% of total tax revenues collected during 2024. 11. The fixed component was calculated based on the prevailing excise rate per pack and the estimated ilicit volumes during each year. An assumption regarding the factory gate price was required to calculate the ad valorem component. The factory gate price for Nyala as supplied by NTE was used for this purpose, given that 1) illicit producers would have to raise prices if they were compliant with regulations and taxes, 2) Nyala holds a dominant share of the legal market by volume and 3) information and data on ilicit production costs and factory prices is limited due to the nature of the market. It is also worth noting that illicit volumes in 2020 assumes that the total market size was similar as in 2021.