Federal and regional governments turn to mandatory fees as state expenditures mount
A new bill before federal lawmakers defines critical infrastructure as any asset whose disruption endangers the economy or national security, requiring operators to finance their own digital defence. Legislative trends are shifting costs once carried by the state directly onto citizens, businesses, and public service employees, citing digital protection as too costly for regular budgets. The law covers sectors from health and energy to education, establishing a fund office supported by service fees and enforcement fines.
IN A NUTSHELL
- A new bill shifts the financial burden of cyber defence from the state to the owners of critical infrastructure across sectors like finance and energy.
- The federal government is increasingly using “ring-fenced” funds and mandatory contributions, from one percent to five percent on services.
- Small, recurring fees are being embedded into daily life, including five Birr on water bills and 30 Br on domestic flights, to finance emergency and infrastructure funds.
- Parliament is operating at an intensified pace, passing 49 regulations in the past year alone, with 15 approved without public discussion.
- Administrative barriers often prevent citizens from challenging these regulations in court, as cases are frequently dismissed for a lack of “vested interest.”
- A bill before federal lawmakers last week extends the mandatory contribution system to cyber protection. If approved, owners of critical infrastructure would help finance the defence of systems they operate, extending a legislative trend that asks citizens, businesses and public institutions to shoulder costs once carried by the state.
The bill defines critical infrastructure as assets whose disruption could endanger the economy, national security, law and order, or diplomatic relations. Private and government-operated institutions would be covered, with the point made that digital protection is considered too costly or too urgent for regular budgets. Under the bill, a cyberattack includes any cyberspace operation that disrupts, interrupts, suppresses, infiltrates, steals data from, or otherwise compromises critical infrastructure.
The draft law lists critical sectors from information and communication to finance, security and from transport, education, health, energy and public services. It would establish a fund office to safeguard these systems. Its revenue sources would be detailed later by regulation, but the bill identifies service fees, and enforcement fines. Contributions from critical-infrastructure owners would form its main income stream.
The proposal follows laws and regulations before the federal legislative House that rely on dedicated funds, drawing money from the public or contributing institutions.
The pattern points to a fiscal shift in which state responsibilities are financed through ring-fenced offices and compulsory payments, often outside the tax system. Critics say the design repeatedly reaches the same population through routine services, creating a burden that is not labelled as tax but behaves like one.
Parliament granted the Ethiopian Disaster Risk Response Fund Office (EDRRFO), approved months ago, the right to mobilise emergency funds from consumers. Rather than relying on budgets, the scheme collects revenue from daily services by charging small fees for recurring transactions. Individuals contribute when they use digital banking, buy an insurance policy, telecom airtime and data, airline tickets, and when they receive dividends.
The fund also draws from passport and visa fees, trade licence services, fuel suppliers and document authentication services. It receives budget allocations, private company payments and voluntary donations. The Customs Commission is mandated to transfer money or goods seized from illicit trade into the fund. Chemical producers, tobacco and alcohol companies, and logistics firms must also contribute. The rates are explicit. Digital banking users and telecom customers pay five percent on service fees. Insurance premiums, loans and dividends carry a one percent charge.
Federal officials argue the approach is necessary at a time when foreign aid has declined, spending needs have grown, and the state cannot meet emergency demands alone. It will finance humanitarian aid, build food and non-food reserves, expand storage facilities and strengthen emergency infrastructure.
The same model is spreading to cities. The Addis Abeba City Administration has introduced a regulation following the same pattern. Public servants in the city are compelled to contribute half a percent of their net salary to an emergency fund to support disaster responses by the Administration. The regulation widens the base to households, businesses, the city budget office and public enterprises. Residents contribute through utility bills, with a flat five Birr added each month to household water payments and channelled to the fund. Every fixed-asset transfer is expected to generate a 0.1pc contribution from buyers and sellers.
Businesses are assessed by tax category. Taxpayers in Category A would pay 2,400 Br, while Category B is subjected to 1,200 Br, and Category C taxpayers pay 600 Br.
A federal law recently added another charge to airline travel. Passengers now pay an aviation security fee through ticket prices. It applies to those travelling with Ethiopian Airlines, passengers arriving in Ethiopia on foreign carriers, and transit passengers passing through Addis Abeba. The law sets revised security service fees and screening charges at one dollar for each international passenger, two dollars for each cargo item, and 30 Br for domestic passengers.
Another newly approved regulation by the Council of Ministers established the Universal Access Fund under the Ethiopian Communications Authority (ECA). Telecom operators are required to pay 1.5pc of gross annual revenue into a federal fund intended to expand communication networks.
Together, these measures show a fiscal turn. Costs once funded by the state are being redistributed through mandatory contributions. The government is widening revenue without always calling payments taxes. The shift comes atop heavy formal obligations. The federal government collects close to 50pc of its revenue from citizens through VAT and income tax. The additional levies arise from laws, regulations, and service charges, creating recurring obligations while the word “tax” is avoided.
According to Mebratu Alemu (PhD), an MP from the Boro Democratic Party who won a seat in the 2024 re-election in Benishangul-Gumuz Regional State and joined Parliament that year, recent laws have imposed severe hardship on citizens. He argued that the ruling party’s dominance in Parliament leaves opposition members able to raise objections but unable to shape outcomes.
“The imbalance has allowed the executive to pass laws with little resistance,” he told Fortune. “New mandatory contributions, introduced during rising living costs and existing tax burdens, will stress households.”
The federal Parliament is nearing the end of its term and is seen as one of the busiest in legislative history, remembered for ratifying many proclamations, some controversial. In the past year alone, the House passed 49 regulations. Of these, 34 followed public discussions or hearings, while 15 did not. Close to 56 bills were tabled, and nine regulations were carried over to the current year. As the term closes, lawmakers continue to approve regulations at an accelerated pace.
According to Daniel Fikadu, a veteran lawyer following parliamentary proceedings, laws passed by “elected” lawmakers cannot automatically be considered illegal. The deeper question for him is whether Parliamentarians are representing citizens or the executive.
“Are they representing the Government or us?” he asked.
For Daniel, federal and regional authorities appear to use the same method, creating fund offices and collecting contributions. He links the trend to economic pressure, arguing that the country is operating under wartime-like fiscal constraints and has lost a degree of economic sovereignty because of debt obligations, including those tied to institutions such as the IMF.
“Since coming to power, the ruling party has been engaged in continuous wars and conflicts, which require substantial financial resources,” he said. “Due to IMF-related pressures, the country does not have full authority to make independent economic policy decisions. It would not be surprising if the government considers mobilising funds from the public to cover rising financial demands.”
According to Daniel, administrative procedure laws allow individuals with vested interests to challenge these regulations, but the route is narrow in practice. Cases are often dismissed at the registry level when petitioners are found to lack “vested interest,” ending legal challenges early.
“That discourages legal remedies,” said Daniel.
Daniel maintained that the public should not accept laws unexamined. He says citizens and advocacy groups should be able to seek court review or the revision or dismissal of laws when necessary.
Fethi Mahdi (PhD), an MP from Harari Regional State, representing the ruling party and deputy chairperson of the Foreign Relations & Peace Affairs Standing Committee, rejected such views. He views such laws as facing detailed parliamentary scrutiny and are approved only when lawmakers are convinced they will not burden the public unduly.
“By taking two or three proclamations to say the government is making laws that require contribution is not right,” he said.
The demand for a stronger parliament is shared by Merera Gudina (Prof.), president of the Oromo Federalist Congress (OFC) and a former MP who served for five years representing the Ethiopian Democratic Forces Union (EDFU), a coalition of 13 parties in the third parliament. Merera pronounced the current House as “weak.” He characterised the current legislature as “one that neither enacts strong laws nor exercises proper oversight.”
Comparing the current Parliament to the one he had served, which he claimed had limited power to amend laws, still provided a forum where grievances could be raised.
“Today, that function is mostly absent,” said Merera.
According to Merera, some recent laws do not reflect conditions on the ground or citizens’ economic reality.
“Imposing multiple fees and levies on people already under strain is unfair and questions continuous public fundraising,” he told Fortune. “A government should be trusted by citizens to be elected and removed.”
He also raised concerns about transparency and accountability in the use of public money.
Concerns such as these have not slowed the legislative pace. The cybersecurity bill was referred to the Foreign Relations & Peace Affairs Standing Committee, chaired by Dima Negewo (PhD). Its path could test how far the state will extend a model that turns public risks into mandatory payments, and how much scrutiny lawmakers will apply before citizens, companies and public institutions are asked to pay again.
Source: https://addisfortune.news/new-bill-seeks-to-finance-cybersecurity-through-mandatory-contributions
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