Issue 43: Ride-hailing Users To Pay VAT on Trips

Hello, New VAT law in the making plans to incorporate ride-hailing service into its base and users will be compelled to pay 15 percent Value-Added Tax (VAT) on every trip if the law passes into effect.There is also a new development in the fintech scene and Kacha has become the first private firm to receive a mobile money service license from the National Bank of Ethiopia. Welcome to this week’s edition of Shega Weekly. Here are the major stories from Ethiopia’s innovative ecosystem.  If you are here because someone forwarded you this email, you can subscribe here to get future newsletters.

Issue 43: Ride-hailing Users to Pay VAT on Trips  

The Reporter Newspaper has conveyed that Ride-hailing service users will soon be compelled to pay 15 percent Value-Added Tax (VAT) on every trip they make if the Parliament approves a new bill that is being drafted by the Ministry of Finance.

Drafted by experts drawn from the Ministry and federal tax authorities, the new bill amends the existing VAT proclamation that was legislated in 2002.

The current law exempts ride-hailing companies from VAT. However, this is about to change as the new law is set to classify businesses engaged in the transport sector and include ride-hailing services in the tax base.

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Kacha Becomes the First Private Firm to Receive Mobile Money License in EthiopiaKacha Digital Financial Services S.C has officially become the first private firm to receive a mobile money service license from the National Bank of Ethiopia.Kacha, registered with a subscribed capital of birr 200 million, is the brainchild of Angesom Teklay who is the founder and main power behind Kacha.Angesom is a young serial entrepreneur who has invested in several startups, such as Hulugram, which is a multi-purpose messaging app that is built on top of Telegram. Read More.

Telebirr Sees 100 Million Birr Transaction at Gas Stations in 16 Days The fuel subsidy for public transport service providers being rolled out through the digital money platform Telebirr has facilitated transactions worth 104 million birr in the first 16 days. As of July 22, Telebirr has registered 974 out of the total 1039 gas stations in the country. Meanwhile, 134,684 vehicles have registered for the program as well. 

Lift: The first Subscription-based Ride-hailing Platform in EthiopiaLift Ethiopia, one of Ethiopia’s latest entrants to the ride-hailing sector, is offering a subscription-based service for drivers departing from the industry standard practice of taking commissions.Lift, which went live five months ago, charges its drivers a fixed subscription fee of 449 birr per month regardless of how much money they earn from trips. Read More.

Oromia Bank Begins Digital Transformation with Fintech Veteran MonetaThe homegrown fintech firm Moneta Technologies, which has been a technology partner of Dashen Bank, is expanding its reach and has now partnered with Oromia Bank.The new partnership, announced today, will see Moneta working together with CR2, a global firm that provides digital banking solutions, to build an Omnichannel digital technology platform for Oromia Bank. Read More.

Rica Joins Ethiopia’s Digital Economy with Ecommerce, Ride-haling, Delivery ServicesRica Technologies, an Ethiopian private company that specializes in Internet-related services and products, has unveiled two platforms marking its entry into the eCommerce, delivery, and ride-hailing sectors. Read More

Monetizing Waste: Husky EnergiesIn Ethiopia, coffee is something that is widely celebrated. However, discussions about the massive amount of waste that coffee production leaves behind are not heard quite often.Ethiopia’s coffee waste figures are comparable to the amount of coffee the country exports. A 2017 study stated that Ethiopia disposes of 192,000 tons of coffee husk annually.Meet Husky Energies & Technology, a renewable energy startup that has made its mission to turn coffee waste into a source of energy, solving energy poverty and indoor pollution along the way. Read More. 

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