Ethiopia Doubles Revenue Goal to $12.5 Billion With New Taxes

The country seeks to collect 1.5 trillion birr ($12.5 billion) in the fiscal year to July 7, Prime Minister Abiy Ahmed told lawmakers on Thursday. That compares to 613 billion birr the finance ministry set in its 2024-25 budget presented in June.

To net more revenue, Ethiopia is introducing new taxes including value-added tax on banking services, property taxes and an excise tax on telecommunication services. In the first quarter of the fiscal year that started in July, authorities collected 65% more than a year earlier, but the 180 billion birr is woefully low given the latest target.

Africa’s second-most populous nation signed up for a $3.4 billion IMF bailout in July after defaulting on a eurobond that’s maturing in December. In exchange, it’s had to allow its currency to float freely. Other reforms it’s been implementing include opening up its financial sector to foreign investment and plans to privatize state-owned enterprises, including a giant telecommunications operator.

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