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In a significant move to regulate Ethiopia’s burgeoning digital economy, the federal government has introduced a draft bill proposing a 15% income tax on earnings from social media and online content creation. The proposed legislation aims to formally bring digital creators—such as influencers, vloggers, and affiliate marketers—under the national tax framework, as part of broader fiscal modernization efforts.
The bill, unveiled this week, targets both individuals and businesses—whether based in Ethiopia or abroad—that generate income from Ethiopian viewers, followers, or customers. It encompasses a wide array of monetization channels, including earnings from platforms like YouTube, TikTok, and Instagram, as well as revenue derived from live streams, sponsored content, e-book sales, affiliate links, digital products, and other forms of online commerce.
The proposal is the outcome of months of government deliberations on how to regulate what officials describe as an “unregulated and rapidly growing sector” of the economy. While the country’s creator economy remains relatively new compared to digital hubs like Nigeria and Kenya, it has seen notable growth in recent years, fueled by increased smartphone use, monetization opportunities on global platforms, and growing engagement from both local users and the Ethiopian diaspora.
However, the plan has sparked concern among digital entrepreneurs, especially young content creators who see online work as one of the few viable sources of income in a country grappling with high youth unemployment. Some worry that the tax could hinder innovation and reduce opportunities for self-employment.
The move aligns Ethiopia with a broader continental trend, as several African countries seek to tax the digital economy. Uganda, Kenya, and Ghana have already implemented policies taxing mobile money transactions, online advertising, and influencer earnings.
Government officials say they intend to enforce the new tax regime by working in collaboration with international tech platforms and financial institutions to track and collect revenues. Nonetheless, digital rights groups have raised red flags, urging authorities to involve stakeholders in the process and to clearly define how the tax will be applied in practice.
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The bill is expected to be presented in Parliament for debate in the coming weeks. If enacted, Ethiopia would join a small but growing number of East African nations formally taxing digital creators—a bold step in its ongoing digital and fiscal reform agenda.