Browsing by Author "Muleta Korme"

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    Taxation of Content Creators’ Income in Ethiopia: Legal loopholes and Practical Challenges
    (Addis Ababa University, 2024-05) Muleta Korme; Aschalew Ashagre (PhD)
    A critical analysis of Ethiopian income tax law and other relevant laws shows that content creators’ income generated from divergent activities on various social media platforms, with the exception of royalties, is characterized as business income taxable under Schedule C of the ITP. It remains ambiguous whether royalties derived by content creators should be taxed under Schedule C or D of the ITP. Although the ITP and business registration laws can be interpreted as capturing content creators’ business activities, the ESIC Directive and the presumptive income tax Schedule attached to Income Tax Regulation No. 410/2017 do not include most of content creators’ business activities, except for advertising services, which resulted in non-registration of the content creators and non-taxation of their income. Currently, content creators are neither getting registered and obtaining business license nor discharging their income tax obligations, except for traditional content producers working in areas such as music, movies and media. In addition to the legal loopholes, there are also practical challenges that impede taxation of content creators’ income. This study recommends for Ethiopia imposition of withholding tax on content creators’ income as a separate category of income under Schedule D of the ITP coupled with registration and secondary self-declaration obligations. This tax should be collected through withholding agents as defined under Article 2(26) of the ITP which includes residents of Ethiopia who make payments to content creators.