Strikes and protests in volatile Oromia state reflect widespread anger over business tax rise as the government tries to reduce its reliance on aid 

By William Davison (The Guardian) |

In the dense cobblestone streets of Burayu town, outside Addis Ababa, Melaku Abdella* and his family had been making a living selling basic items such as vegetables, cooking oil and soft drinks at competitive prices from their kiosk. But after the Ethiopian government stung him with a more than 300% tax increase last month, Melaku says he was left with no option but to close the business.

Like many low-income traders in the country’s Oromia region, the family didn’t keep accounts, meaning the authorities based their annual tax demand of 7,000 Ethiopian birr (£231) on an estimate of income. “It’s beyond my capacity to pay. I will have to hand in my business license,” Melaku says.

The hikes on grocers, barbers and cafes were met with widespread anger and protests in parts of the volatile state, which has endured unrest and fatal clashes during the last two years.

The situation creates a dilemma for a government that is desperate to increase income tax and reduce its reliance on aid, but is also wary of further instability. Ethiopia’s parliament only lifted a 10-month state of emergency earlier this month following protests over land disputes and alleged political marginalization. The unrest since November 2015 involved security forces killing at least 600 demonstrators and tens of thousands being jailed, according to the government.

Although still one of world’s least developed countries, Ethiopia’s economy has grown rapidly in the last decade, as the government used loans, aid and tax revenue to build clinics, universities, roads, railways and hydropower dams.

Continue reading this story at The Guardian
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