Ethiopia’s parliament has introduced a new tax for all workers to address the financial gap left by the USAID funding pause. The tax will create a Disaster Risk Response Fund to support projects that were previously funded by USAID amid ongoing regional conflicts that have caused widespread humanitarian needs.
Ethiopia’s parliament has recently enacted a new tax for all workers to address the financial void created by the pause in USAID funding. The revenue generated from this tax will be allocated to a newly established Ethiopian Disaster Risk Response Fund, which aims to sustain projects previously funded through USAID, Ethiopia’s primary partner in development and humanitarian initiatives.
The country is currently confronted with ongoing conflicts, particularly in Tigray, Amhara, and Oromia regions, which have resulted in millions of individuals requiring food assistance and healthcare. The new taxation will affect employees in both the public and private sectors, alongside mandatory contributions from various industries, including banking and hospitality. The proposed bill has been sent to a parliamentary committee for further review regarding the specific tax percentages.
With a population exceeding 125 million, Ethiopia stands as the largest recipient of U.S. aid in sub-Saharan Africa, having received $1.8 billion in the 2023 financial year. Historically, this funding has supported crucial services such as food relief, HIV treatments, vaccines, literacy programs, and employment initiatives, in addition to aid for around 1 million refugees residing in Ethiopia.
Unfortunately, many of these essential programs have been suspended, and USAID staff overseeing these efforts have been placed on administrative leave and warned of potential termination. The resulting implications of the funding freeze are significant, deeply affecting vulnerable populations across the nation.
In summary, Ethiopia’s introduction of a new tax aims to mitigate the financial challenges posed by the cessation of USAID funding. This decision reflects the urgent need to support numerous humanitarian projects, particularly in light of ongoing regional conflicts. As Ethiopia navigates these obstacles, the government’s approach highlights its reliance on domestic solutions to uphold vital services in a time of crisis.
Original Source: www.newsday.com
