Businesses in Oromia return to work after days of strike in Oromia and signs of spread to Addis Ababa, due to a recent increase in tax liabilities of businesses.
Several cities of Ethiopia’s largest region Oromia experienced interruption in business and transport services this week at varying intensity and duration.
The attacks on two vehicles last Friday in Ambo city was the first sign of unrest was seen in Ambo. Ambo city, located 120 km west of Addis Ababa, was a hot spot of the protests in 2014 and also in 2016.
Earlier this week, from Monday to Wednesday, most business firms, and local transport services were on strike in Ambo city, as previously reported by Horn Affairs.
Similar business shutdowns were observed in in Bako, a smaller town about 100 km further west of Ambo, and in Woliso, a major city 110 km southwest of Addis Ababa, in the first three days of the week.
Businesses resumed work on Thursday in Ambo and Bako. According to business owners in the cities, the strike was meant to last for three days in the first place.
In Woliso, however, businesses started returning to work on Wednesday afternoon after a town hall meeting with deputy head of Oromia region Revenue Agency.
In an apparent attempt to enforce the strike, four vehicles were hit in Ginchi, a small town 81 km west of Addis Ababa. The windshield of a bus crossing through Ginchi was shattered by stone on Tuesday. On Wednesday, a police car and two civilian vehicles (described as Isuzu and a minibus) were similarly hit by stone in the outskirts of Ginchi, according to Horn Affairs’ sources in the area.
The attack on the vehicles deterred most of the buses and minibuses from leaving Addis Ababa terminal until Thursday.
The business strike appeared to be spreading to Addis Ababa on Thursday. Hundreds of businesses closed their firms on Thursday in Kolfe subcity, a major market area in the northwestern part of Addis Ababa. They returned to business on Friday, however.
Horn Affairs’ sources reported minor incidents in other areas as well. Attacks on vehicles was reported on Monday about 250 km south of Addis Ababa, in Shashemene and Kofele on Sunday and Monday. Business strikes were reported about 500 km west of Addis Ababa, in Mendi and Nejjo on Thursday. However, those incidents appear to have subsided quickly.
The tax issue
Business owners point to the latest tax assessment as the cause of their grievance and strike.
Business owners in the lowest income tax category are subjected to presumptive taxes, as they are not obliged to keep books and accounts. Tax officers periodically estimate the annual turnover of these businesses once in four years. The assessment determines their annual tax liabilities as well as whether they should remain in that category. (See the explanation in the previous post)
As July/August is the tax pay month of small businesses, business owners of learned their newly estimated turnover in the past weeks. Some businesses are evidently overestimated, while other businesses wish to keep their taxes as low as it used to be.
The new assessment was conducted across the country and business owners are expressing outrage in several parts of the country. However, this week’s business strike was observed in a few areas which were also hotspots of last year’s Oromo protest, while other areas showed little or no signs of unrest. It appears the outrage of business owners was compounded by the anger left from last year’s unrest.
The 2016 protests in Oromia left about four hundred people dead and led to the declaration of a state of emergency. Even if the state of emergency is still in place, the government relaxed the terms and withdrew military forces from most areas in the beginning of the year.