In recent weeks, reports have highlighted additional taxation affecting ride-hailing drivers in Ethiopia, at a time when they are already facing rising tax bills and operating costs. Discussions around the approach to taxing app-based rides have naturally drawn attention to what such changes could mean for drivers and passengers.

Ethiopia’s decision to bring ride-hailing into the VAT system is part of a legitimate effort to modernise the tax base for the digital economy. For the thousands of drivers who earn their living through these apps, though, the real question is not the principle but who will actually bear the cost. Under the current proposal, VAT would apply to the full value of every ride booked through a platform, not only to the platform’s commission. Most drivers are individual earners operating well below any VAT threshold, and they would have no way to recover that tax. In practice, the burden is likely to land on them, either through lower take-home pay per ride or through higher fares that push passengers back toward informal street hailing. For drivers who chose platforms precisely because they offer traceable income and a degree of formal status, the design of this measure could decide whether digital work remains a viable livelihood or becomes a reason to leave it.

Protecting drivers’ livelihoods

This debate comes at a difficult time for Ethiopian households. After falling to 9.4% in March 2026, its lowest level since 2018, inflation rose again following the oil shock linked to the conflict in the Middle East. According to the Ethiopian Statistics Service, it reached 15.3% in July 2026, with food prices rising even faster. Fuel has been at the centre of this shift. Between January and May 2026, the price of a litre of petrol rose by around 30%, to 167.50 birr, while diesel climbed by some 40%, to just over 180 birr, and supply shortages left many vehicles idle. For ride-hailing drivers, most of whom are self-employed, often rent their vehicles and have neither a guaranteed income nor social protection, these increases have already significantly reduced net earnings. Any additional cost would therefore fall directly on a workforce with very little room to absorb it.

But, the Ministry of Revenues’ letter/guidance on the mechanism recognises that the income generated from a ride belongs to the transport service provider, the driver, rather than to the platform. Applying VAT to the full fare therefore means that the tax base consists, in large part, of the driver’s own income. This situation is well documented internationally. As noted in the report The Impact of the Growth of the Sharing and Gig Economy on VAT/GST Policy and Administration, published by the OECD in 2021, regimes that make platforms liable for VAT on the full value of the services they facilitate can have a significant negative effect on providers’ earnings. The same report observes that such an approach may bring within the scope of VAT activities that would not otherwise be taxed, since thresholds are then assessed at the level of the platform rather than for each individual driver. It also notes that people providing labour-intensive services through platforms tend to come from the lower end of the income spectrum.

A simple illustration helps to measure what is at stake. At Ethiopia’s standard rate of 15%, a ride priced at 100 birr, if the fare remains unchanged, contains 13.04 birr of VAT, meaning that more than 13% of the value of the ride no longer reaches the driver. This would materially reduce the amount available to cover the driver’s earnings and operating costs.

If the tax is instead fully passed on to the passenger, the same 100-birr pre-tax ride would cost 115 birr. The economic impact may therefore fall on the driver, the passenger, or be shared between them depending on market conditions.

By comparison, if the platform’s commission on the same ride were, for example, 15 birr, VAT applied to that commission alone would amount to 2.25 birr. The choice of tax base therefore makes a considerable difference.

This is not a theoretical alternative. A 2025 KPMG Advisory whitepaper on mobility regulation recommends that governments collect VAT on platform commissions and have platforms act as withholding agents for drivers, keeping any additional per-ride levies low and consistent (0.5–1%) so as not to overburden the sector. Côte d’Ivoire already applies this design in practice, licensing platforms and charging 18% VAT on the commissions they earn, rather than on the full value of each ride. – an arrangement KPMG credits with integrating a significant portion of the informal transport economy into the formal accounting system.

Keeping everyday mobility affordable

Where drivers are unable to absorb this additional cost, part of it is likely to be reflected in fares. In the same illustrative example, a 100-birr ride would cost 115 birr if the tax were fully passed on. For many households that rely on these services to reach their workplace, a health centre or a school, this would add to existing pressure on purchasing power.

European experience offers a helpful point of reference. According to the Study on the economic effects of the current VAT rules for passenger transport, prepared in 2014 for the European Commission by a consortium led by the CPB Netherlands Bureau for Economic Policy Analysis, 17 of the 28 EU Member States applied a reduced rate, an exemption or a special scheme to domestic taxi services at the time, rather than their standard rate. Sweden taxed taxi rides at 6% against a standard rate of 25%, the Netherlands at 6% against 21%, and Germany at 7% rather than 19% for journeys within a municipality or shorter than 50 km. Italy exempted urban taxi transport altogether, on the grounds that it serves the public interest. These choices reflect a widely shared recognition that everyday mobility merits particular attention in the design of consumption taxes.

Supporting formalisation

Every ride booked through an application leaves a record of who provided the service, when, where and at what price. The OECD report highlights the considerable opportunities that platforms create for greater visibility and traceability of economic activity, and for the formalisation of previously informal activity, particularly in developing economies, notably by reducing the cash-based informal economy. Preserving these benefits requires that operating within such traceable ecosystems remains attractive for drivers and passengers alike. The OECD makes a comparable observation about certain other collection mechanisms, noting that they may encourage the use of cash or of payment channels outside the formal system.

A balanced implementation in everyone’s interest

The objective is not to question the principle of taxation, but to ensure that it is applied in a proportionate and economically sustainable way. The ride-hailing sector plays an important role in Ethiopia. It supports tens of thousands of drivers, some of them graduates with few other job opportunities, and complements a largely saturated public transport network in a city where the vast majority of trips rely on public transport or walking. It already contributes to public revenue, with over 340 million birr in income tax collected from more than 33,000 drivers in Addis Ababa, and is one of the most dynamic sectors of the country’s digital economy.

However, a heavy VAT burden on app-based rides could prove counterproductive. If the additional cost makes platform rides less attractive, some drivers and passengers may turn to offline, cash-based arrangements. Local press already reports this shift among drivers facing higher tax bills. The OECD warns that taxing the full value of rides at platform level can discourage drivers from using the platforms concerned, even though platforms are one of the most effective tools for formalising previously informal activity. Rides that leave the platforms also leave the most traceable part of the sector, narrowing the tax base and ultimately reducing rather than increasing government revenue.

Recent scandals reveal a society in the grip of anomie, where shared moral norms no longer restrain the powerful or protect the vulnerable.

In July, a 29-year-old woman named Kidusan Yirgalem Weldesilasie was kidnapped in Addis Abeba. Her abductors called her family and demanded a ransom. By late July she was dead. Her younger sister, Ruth, was at that moment preparing to represent Ethiopia at the Miss World pageant in Vietnam. Speaking to AFP in September, Ruth described what it meant to receive that call: “Imagine the person that you care for most has a price one day” (Agence France-Presse, 2026). Ten suspects have reportedly been arrested, among them, by her account, people the family knew and trusted.

Around the same time, a very different story was spreading across Tigray. A video began circulating on social media showing a woman with a senior cleric of the Tigray Orthodox Tewahedo Church. According to accounts circulating with the video, the woman released it herself, after repeated attempts to end what she describes as a relationship of sexual exploitation that began during the war, when she was working in a restaurant and he offered help at a moment when she had nowhere else to turn. These claims have not, to my knowledge, been independently investigated or adjudicated, and they must be treated as allegations. But the public reaction has been revealing. Much of the debate, among church members and outsiders alike, has focused on the woman’s shame rather than on the question of power.

Meanwhile, in parts of Ethiopia’s fast-growing prophetic and prosperity movements, which emerged largely from the Pentecostal and charismatic stream of Protestant Christianity, a different message circulates. In a sermon delivered in August 2026 and widely shared on Facebook, Prophet Henock, who leads the church known as GPS, tells his audience that no one becomes rich through hard labour; the wealthy, he says, either ride the hyena, a local image of evil forces, or speak in tongues, harnessing the Holy Spirit to their advantage (Henock, 2026).

Many Ethiopians describe these episodes as evidence of moral decline. I agree that something profound has broken, and I want to name it more precisely. Borrowing from the sociologist Émile Durkheim, I argue that Ethiopia is experiencing anomie: a condition in which the shared norms that regulate behaviour have lost their binding force. What these cases share is a pattern in which people with authority, whether spiritual, social or armed, convert other people’s vulnerability into money, sex or power, and in which the institutions that should hold them to account either cannot or will not. That is what anomie looks like in practice.

Anomie: when norms lose their grip

Durkheim (1897/1951) used the term anomie to describe what happens when a society loses its capacity to regulate the conduct and desires of its members. Norms continue to exist; they are recited in sermons, written into law and repeated by elders. What disappears is their force. Durkheim observed that anomie tends to arise in periods of sudden disruption, whether economic crisis or rapid social change, when the order that tells people what they may legitimately want, and how they may legitimately pursue it, is shaken. Desires lose their limits, and restraint begins to look naive.

Ethiopia fits this description with painful precision. War, mass displacement, economic hardship and the collapse of trust between citizens and the state have unsettled the structures that once carried moral regulation. Religious leaders, elders and families, traditionally the guardians of norms, are weakened, discredited or themselves implicated in wrongdoing. When the guardians of norms violate them, the norms themselves lose credibility. This is the difference between ordinary wrongdoing, which every society has, and anomie. In an anomic society, wrongdoing no longer provokes the collective reaction that would restore the norm. The debate around the Tigray video, in which condemnation fell on the woman rather than on the abuse of power, is a clear example.

Robert Merton (1938) extended Durkheim’s insight. For Merton, anomie is produced by strain between the goals a culture celebrates and the legitimate means available for reaching them. When wealth and success are celebrated but lawful routes to them are closed, some people turn to what he called innovation: pursuing the approved goal through illegitimate means. The kidnapper who puts a price on a human life and the preacher who tells followers that labour cannot make them rich are, in this sense, two faces of the same strain.

Naming the condition precisely matters for a practical reason. The language of moral decline invites preaching and blame. The concept of anomie directs attention to the institutions that are supposed to regulate behaviour, and that is where the remedy lies.

The conditions: war, displacement and precarity

The Tigray war of 2020 to 2022 was not only a military catastrophe. It systematically destroyed the social protections on which ordinary people rely. Sexual violence against women was widespread during the conflict, and Human Rights Watch (2026) reported that Eritrean troops continued to commit rape and sexual violence against women in occupied areas of Tigray even after the 2022 cessation of hostilities agreement. Displacement severed women from the kin networks that traditionally offered protection. Livelihoods disappeared. In such conditions, a woman working in a restaurant who is offered help by a powerful man is not negotiating as an equal, whatever the formal appearance of the relationship.

The same logic extends well beyond Tigray. The armed conflicts in Amhara and Oromia have produced what Human Rights Watch (2025) described as a sharp rise in kidnappings for ransom, with authorities failing to address the crisis. The Ethiopian Human Rights Commission’s annual report covering mid-2023 to mid-2024 identified the kidnapping of civilians, including for ransom, as a grave concern in both regions (Ethiopian Human Rights Commission, n.d.). In July 2024, gunmen near Garba Guracha in Oromia abducted busloads of students travelling home from Debark University; families later reported ransom demands of 500,000 to 700,000 birr per captive (Addis Standard, 2024; U.S. Department of State, 2025). Many of those families earn nothing close to that in a year.

Precarity is the common thread. Where the state cannot guarantee safety, where work does not guarantee a living, and where war has stripped away ordinary support, vulnerability becomes a resource that others can extract value from.

Three forms of the same pattern

The first form is the exploitation of the body by spiritual authority. The Tigray allegation, whatever the eventual findings, illustrates a structure that is well documented in religious institutions around the world. A cleric’s authority is not only administrative; it is sacred. Challenging him can feel like challenging God, and the community’s instinct is often to protect the institution’s reputation rather than the person harmed. That the woman in this case reportedly felt her only remaining option was public exposure, at enormous cost to herself, tells us how little confidence she had in any internal remedy.

This case also sits inside a bitter institutional dispute. The Tigray Orthodox Tewahedo Church broke from the Ethiopian Orthodox Tewahedo Church’s Holy Synod during the war, arguing that the Synod’s support for the war had cost it its moral authority; the Synod in turn excommunicated the Tigrayan archbishops (Addis Standard, 2023). Partisans on both sides will be tempted to use the allegation as ammunition. They should resist. The question it raises, how a church protects the vulnerable from its own leaders, applies with equal force to the Holy Synod in Addis Abeba, to Protestant denominations and to Islamic institutions. No Ethiopian religious body, as far as I am aware, has a transparent, independent mechanism for handling sexual misconduct complaints against senior clergy.

The second form is the commodification of the sacred. Max Weber (1922/1978) distinguished charismatic authority, grounded in a leader’s perceived extraordinary gifts, from authority grounded in tradition or law. Charismatic authority is powerful precisely because it answers to no rulebook. Some of Ethiopia’s new prophetic movements have turned this into a business model. When a preacher tells a congregation of young, underemployed people that labour cannot make them rich and that wealth comes through spiritual power, the message does two things at once. It speaks honestly to a real experience, since many young Ethiopians do work hard and remain poor. And it redirects that frustration away from structural causes and toward the preacher, who positions himself as the gatekeeper of supernatural prosperity. Offerings, “seed” payments and fees for personal prophecy follow. The poor finance the wealth that they are promised.

It would be unfair to caricature all of Ethiopia’s Pentecostal and charismatic churches this way; many are sites of genuine community, mutual aid and moral seriousness. Nor is the commercialisation of religion confined to them. Fundraising pressures, the sale of blessings and the entanglement of clergy with political patrons can be found across traditions. The issue is not a particular theology but the absence of financial transparency and of any mechanism by which ordinary believers can hold religious leaders to account.

The third form is the pricing of human life. Kidnapping for ransom is the most literal expression of the pattern: a human being is converted into a sum of money. Kidusan’s killing is especially disturbing because, according to her sister’s account, those arrested include people close to the family. When the logic of extraction penetrates relationships of trust, friendship itself becomes a source of risk. Kidnapping in Ethiopia is often discussed as a security problem in conflict zones. The Addis Abeba case suggests it has also become a template, a known method of making money that criminals in the capital can borrow.

Why accountability keeps failing

Across all three forms, the same failures recur.

First, deference to authority. Ethiopian social life has long honoured elders, clergy and officials. That respect has real value, but it becomes dangerous when it shields the powerful from scrutiny. The instinct to say “do not speak ill of a father of the church” protects abusers far more often than it protects faith.

Second, shame is placed on the victim. The public response to the Tigray video has too often treated the woman as the scandal. This is the logic of honour at work: damage to reputation is feared more than the harm itself, and the person who exposes wrongdoing is blamed for the exposure. As long as that logic holds, most victims will stay silent.

Third, institutions protect themselves. Religious bodies in Ethiopia are powerful social actors, often closely tied to political authorities at federal and regional levels. When misconduct becomes public, their first instinct is often to manage the damage rather than investigate it. The schism between the Tigray and national Orthodox churches makes this worse, because every allegation becomes a factional weapon rather than a question of justice.

Fourth, the state is absent or partial. Where security forces cannot protect travellers on major roads, and where families of kidnapped students say they have received calls from officials but seen no action (Addis Standard, 2024), people learn that the law will not help them. Families then raise ransoms themselves, which only makes kidnapping more profitable.

Signs of resistance

A purely pessimistic account would be inaccurate. The same period that produced these scandals has also produced resistance. A woman in Tigray, whatever one makes of her methods, has refused silence about a powerful man. Ruth Yirgalem Weldesilasie chose to carry her grief onto an international stage to draw attention to violence against women. According to AFP, a petition urging the government to declare violence against women a national crisis has gathered nearly 170,000 signatures (Agence France-Presse, 2026). Journalists, human rights defenders and the Ethiopian Human Rights Commission continue to document abuses under difficult conditions. They show that anomie is not the whole story: moral conviction survives among individuals even where institutions have stopped enforcing it. The task is to rebuild the regulating structures that can give that conviction force.

What should change

Religious institutions of every tradition should establish independent, confidential channels for reporting sexual misconduct by clergy, with investigations that do not answer to the accused or their allies. They should publish their finances. And they should say clearly, from the pulpit and the minbar, that a victim who speaks is not the source of scandal.

The state must treat kidnapping for ransom as a national emergency rather than a regional inconvenience, prosecute cases transparently, and support families rather than leaving them to negotiate with abductors alone. Gender-based violence, including exploitation by people in positions of trust, must be investigated whether or not the accused is powerful.

Civil society and the media carry responsibilities too. Reporting should centre on the conduct of the powerful, not the exposure of the vulnerable. And ordinary Ethiopians can make one immediate choice: stop sharing the Tigray video. Every forward of it repeats the harm to the woman it depicts, while doing nothing to establish the truth of her allegations or to hold anyone to account.

Conclusion

Ethiopians are right to feel that something is badly wrong. What they are witnessing is anomie: norms that everyone still recites but that no longer restrain the powerful or protect the weak. A society under prolonged stress has left many people exposed, and those with authority, spiritual, social or armed, have too often exploited that exposure without consequence. Sermons and nostalgia will not fix this, because the problem is not that Ethiopians have forgotten right from wrong. It is that the institutions meant to uphold it have lost their grip.

Anomie is not permanent. It ends when institutions, religious and secular, are once again willing to be held to the standards they preach, and when wrongdoing again provokes a collective response that restores the norm. Kidusan’s family was asked to put a price on her life. The least the rest of us owe her, and the woman in Tigray, and the students taken on the road from Debark, is to insist that the people who put prices on human beings are named, judged and stopped.