“Ethiopia Implements New Tax to Offset USAID Funding Pause”
ADDIS ABABA, Ethiopia (AP) — The Ethiopian parliament has approved a new tax on all workers in response to the suspension of USAID funding. The revenue generated will support the Ethiopian Disaster Risk Response Fund, which will finance projects previously supported by USAID, the country’s primary development and humanitarian partner.
Ethiopia is grappling with ongoing conflicts in regions such as Tigray, Amhara, and Oromia, leading to widespread food insecurity and healthcare needs. The new tax will be applicable to employees in both the public and private sectors, with companies in industries like banking and hospitality also required to make contributions. The specifics of the tax percentages are now under review by a parliamentary committee.
With a population exceeding 125 million, Ethiopia was the largest recipient of U.S. aid in sub-Saharan Africa, receiving $1.8 billion in the 2023 fiscal year. The funds supported critical initiatives including food assistance, HIV treatment, vaccinations, education programs, job creation, and services for over 1 million refugees sheltered in Ethiopia. Many of these essential programs have now been suspended, with USAID personnel overseeing them placed on leave pending potential termination.
