Ethiopia’s parliament has introduced a new tax to fill the financial gap left by the pause in USAID funding. The revenues will be directed to a new Ethiopian Disaster Risk Response Fund to support previously affected projects. This decision comes amid ongoing regional conflicts that have left millions in need of humanitarian assistance.
Ethiopia’s parliament has recently enacted a new tax for workers as a response to the financial challenges stemming from the pause in USAID funding. The proceeds from this tax will be allocated to a new Ethiopian Disaster Risk Response Fund, aimed at supporting projects previously financed by USAID, which has been a crucial partner in Ethiopia’s development and humanitarian initiatives.
The country is currently grappling with continuous conflicts in various regions, notably Tigray, which is recovering from a protracted two-year conflict, as well as in Amhara and Oromia. These crises have resulted in millions requiring urgent food assistance and healthcare services.
The newly instituted tax will affect employees in both the private and governmental sectors, with mandatory contributions expected from businesses in various industries, including banking and hospitality. The bill has been submitted for review by a parliamentary committee to determine the specific contribution percentages.
Ethiopia, home to over 125 million individuals, has historically been the largest recipient of U.S. aid in sub-Saharan Africa, receiving $1.8 billion in the 2023 fiscal year. These funds have been pivotal in providing food, HIV medications, vaccines, and educational programs, as well as supporting one million refugees residing within Ethiopia.
Due to the funding cut, many of these critical programs have been halted. Meanwhile, USAID staff overseeing these initiatives have been assigned to administrative leave and are faced with the possibility of termination.
In summary, Ethiopia has initiated a new tax to mitigate the financial repercussions of the USAID funding disruption. This move aims to support vital humanitarian and development projects in a country facing severe challenges due to ongoing conflicts. The government’s response underscores the urgency of addressing the needs of millions reliant on international aid, while the new tax is a significant step towards funding essential services.
Original Source: www.newsday.com
