Borkena News Desk
Toronto, Canada — As discontent among Ethiopia’s business community continues to simmer over what many describe as an “out of control” tax burden situation, Prime Minister Abiy Ahmed’s government is reportedly planning to introduce new taxes starting in the Ethiopian New Year in September.
According to sources, the government is poised to introduce new taxes on fuel, real estate, alcoholic beverages, and investments. There are also claims that the tax measures are an IMF condition for securing an additional $5 billion in financing. Borkena has not independently verified the reports.
Sources in Ethiopia also reported that the government is scrapping fuel “subsidies.”
The reported tax plans and fuel subsidy changes come as businesses continue to struggle with the economic measures introduced by the government in July 2024. There have been extensive reports that the macroeconomic measures were tied to the IMF’s Extended Credit Facility arrangement. Changing the foreign exchange regime and devaluing the Ethiopian currency were among the reforms introduced at the time.
Within less than six months, the Ethiopian birr lost over 100 percent of its value against the U.S. dollar and other major currencies.
The tax burden has also been fueling business license cancellations over the past few years. Critics claim that hundreds of thousands of businesses have returned their licenses during this period.
Despite worsening economic hardship and a security situation that has reached crisis levels in parts of the country, negatively affecting economic activity, Prime Minister Abiy Ahmed’s government claimed more than 90 percent of the vote in the seventh general election held last month.
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