Experts at the Ministry of Finance are drafting legislation that would see digital content creators included in the tax bracket for the first time.
A draft regulation proposes to levy federal income tax on content creators who earn more than 50,000 Birr annually, although officials say the threshold could still be changed.
If the regulation is approved by the Council of Ministers, content creators will be required to pay tax quarterly under a taxpayer identification number. Businesses who pay content creators will be required to provide any relevant information about their transactions to tax authorities.
The draft states that tax officials will monitor digital content creators in collaboration with international digital platforms and digital service providers.
“Any online platform which facilitates payments for digital content creators that are residents in Ethiopia and whose annual income exceeds the threshold to be determined by a Directive to be issued by the Ministry shall report to the Tax Authority the amount of gross income each creator has received,” it reads.
Like any business, content creators earning over two million Birr (Category A) annually will be required to keep account of revenues from advertisement, sponsorship, subscribers and other sources of income. They will be obliged to present all agreements with sponsors or advertisers to the relevant tax authority, while in-kind benefits will also be taxed following appraisal of monetary value, according to the draft.
Finance officials have dispatched letters to regional finance bureaus inviting their representatives to take part in discussions on the draft next week.
Officials say they expect to table the regulation to the Council of Ministers in the near future.
