Ethiopia has introduced a new tax for all workers to fill the financial gap after USAID funding was paused. The revenue will fund the Ethiopian Disaster Risk Response Fund, which supports critical projects. The country faces multiple conflicts affecting millions in need of aid. USAID’s previous funding was significant, but many programs have been halted due to staff layoffs.
Ethiopia’s parliament has introduced a new tax for all workers to address the financial void left by the halt in USAID funding. The revenue generated will support the newly established Ethiopian Disaster Risk Response Fund, which aims to cover projects previously funded by USAID, the country’s largest partner in development.
Ethiopia is grappling with ongoing conflicts, particularly in Tigray, Amhara, and Oromia, which have resulted in millions requiring food assistance and healthcare services. The newly mandated tax will impact both private and public sector employees, with companies in various industries, including banking and hospitality, also expected to contribute. The proposed legislation is currently under review by a parliamentary committee to determine the specific tax rates.
In the 2023 financial year, Ethiopia, home to over 125 million people, received $1.8 billion in aid, positioning it as the largest recipient of U.S. assistance in sub-Saharan Africa. The prior support encompassed essential services like food aid, HIV medications, vaccines, literacy initiatives, and employment programs, along with support for one million refugees within the country.
However, many of these crucial programs have been suspended due to the funding cessation. Additionally, USAID personnel who managed these initiatives are currently on administrative leave and face potential termination, marking a significant setback in humanitarian efforts.
Ethiopia’s introduction of a new tax reflects its urgent need to fill the funding gap left by USAID’s pause. The tax is aimed at sustaining critical programs amid ongoing conflicts that have created widespread need for assistance. The shift in financing underlines the importance of continued support for humanitarian initiatives in the face of changing geopolitical dynamics.
Original Source: www.newsday.com
