ADDIS ABABA, March 20 (AGCNewsNet) – Ethiopia’s parliament has introduced a new tax on all workers to fill the financial gap left by the suspension of USAID funding, the country’s largest source of development and humanitarian assistance.

The funds collected will go into a newly established Ethiopian Disaster Risk Response Fund, aimed at financing projects previously supported by USAID. The tax will apply to employees in both the private and public sectors, while businesses in industries such as banking and hospitality will also be required to contribute. A parliamentary committee is set to determine the exact percentage rates.

Ethiopia, with a population exceeding 125 million, was the largest recipient of U.S. aid in sub-Saharan Africa, receiving $1.8 billion in 2023. The suspension has halted critical programs, including food aid, HIV treatment, literacy initiatives, and job creation efforts, as well as support for over 1 million refugees in the country.

The tax comes amid ongoing conflicts in regions such as Tigray, Amhara, and Oromia, where millions remain in need of humanitarian assistance. Meanwhile, USAID staff overseeing the suspended programs have been placed on administrative leave, facing potential termination.

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