A new draft regulation prepared by Ethiopia’s Ministry of Finance proposes that digital content creators earning more than two million birr annually from platforms such as TikTok, YouTube, Facebook, podcasts, and live-streaming services be classified as business operators and required to pay business income tax.
The regulation outlines detailed tax obligations for digital creators, expanding on provisions first introduced under the 2017 Income Tax Proclamation, which formally recognized digital content creation as a taxable economic activity. The latest draft provides clearer guidelines on who qualifies, what forms of earnings are taxable, and how income should be documented.
Under the proposal, content creators will be required to keep accurate, verifiable accounting records documenting all income sources, including advertising revenue, sponsorships, brand partnerships, crowdfunding, gifts, and payments received in cash or in kind. These records must include contracts with sponsors, bank statements reflecting payments, and market-value assessments for non-cash benefits received in exchange for promotional work.
The draft law outlines three key criteria under which digital content creation is classified as “business income.” A creator falls into this taxable category if their annual earnings exceed two million birr, if their activities are organized under a formal entity, or if they are required to maintain accounting records and claim deductible business expenses. Creators who do not meet these conditions will still be taxed, but under the “other income” category at a flat rate of 15 percent.
If approved by the Council of Ministers, the regulation would formally integrate many digital creators into Ethiopia’s tax system for the first time. Supporters argue that the rise of monetized social media content has created a rapidly expanding digital economy that should be regulated similarly to other professional sectors.
Popular TikToker Brooke Chala, widely known as “Brook News,” expressed support for the move, saying he anticipated taxation and has already formalized his advertising work by securing the proper licensing. However, he also raised concerns that the proposed two-million-birr threshold may be unrealistic due to high production costs, lack of official receipts, and other expenses that many creators incur but are not recognized. He emphasized that while digital content creation has become a meaningful source of income for many Ethiopian youth, policies must reflect the economic realities of the sector.
The draft regulation marks a significant policy shift, signaling Ethiopia’s recognition of digital content creation as a legitimate economic activity. As the country’s creator economy continues to expand, the final decision on this law may shape not only how influencers and online entertainers are taxed, but also how digital entrepreneurship evolves in Ethiopia.
