Ethiopia
New disaster relief tax law
Impact date: 20 March 2025 Ethiopia has introduced a new tax requiring both public and private sector employees to contribute a portion of their net monthly salaries to the Ethiopian Disaster Risk Response Fund. This initiative aims to finance disaster preparedness and response efforts, compensating for the suspension of USAID funding. Additionally, businesses across various sectors, including banking and telecommunications, are mandated to make contributions.
Employer implications/action needed The ratified disaster relief tax law requires employers in both public and private sectors to deduct and remit monthly contributions from employees’ salaries. Additionally, employers in sectors such as banking, finance, and hospitality must pay service-based levies to the Ethiopian Disaster Risk Response Fund.
Employer risk The risk to employers seems to be minimal, likely related to their responsibility to implement the law by correctly deducting the tax from employees’ wages and remitting it on time.
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