The Ethiopian Government imposing un indirect income tax on the people of Ethiopia- people unable to make ends meet

The recent surge in service fees at government institutions has left many shocked and confused, with the increases appearing unprecedented and unjustifiable. Services such as the renewal of driver’s licenses, vehicle ownership certificates (libere), replacement of lost driver’s licenses, and Bolo (annual vehicle inspection) do not require special technical expertise, skills, or knowledge beyond printing cards, papers, and stickers.

However, the Ethiopian government, merely by virtue of being the service provider, has raised prices by 150% to 700% for services that are already inefficient, outdated, and prone to corruption. This price hike does nothing but further frustrate the public. It is difficult to comprehend the logic behind such an exorbitant increase, and the justification for these hikes has not been disclosed.

The cost of the materials, such as paper, cards, or stickers, is not more than 50 birr, whether sourced through imports or from the local market. Yet, opening a computer, verifying names, and confirming that an existing driver’s license is valid now incurs a price increase of 900%, despite the fact that the actual service costs less than 100 birr.

For instance, the fee for transferring a title of ownership has risen from 3,000 birr to 5,000 birr, annual vehicle inspection (Bolo) from 1,010 birr to 2,500 birr, and issuance of a vehicle ownership certificate from 300 birr to 1,200 birr. Additionally, the Commercial Bank of Ethiopia has already decided to apply Value Added Tax (VAT) to all services provided starting October 1, 2024. Reports from social media also suggest that Ethio Telecom is expected to follow this pattern and raise service prices in the near future.

The arbitrary price increases for government services are a clear sign that the country is heading in the wrong direction. A large majority of Ethiopians believe the government isdoing a very bad job in its management of the economy. The drastic price hikes on literally every item in the market as a result of the currency floating regime coupled with a more than doubling of all government administrative costs across the board, are stifling the economy and causing significant harm to the public by way of a staggering increase in the cost of living . Obviously, all this is the result of the failed economic policy being pursued by the OPDO/Prosperity regime, to indirectly increase it tax base for the purpose of funding its war effort in the Amhara region.

© Written by Ameha Hailemariam, North America Support Group