Ethiopia, a country with a rich and diverse history, has recently passed a landmark bill on gaming tax. This move positions Ethiopia as a potential leader in Africa’s gaming industry. However, challenges remain, particularly laws that restrict foreign ownership of gaming companies within the country.
Under the Lottery Regulation No. 172/2012, Ethiopian gaming companies are subject to both Value Added Tax (VAT) and Indirect Tax (ToT) on their gross sales revenue. Specifically, the government imposes, 15% VAT and 10% ToT
These taxes are calculated after deducting the 15% VAT and 10% ToT from total sales proceeds.
According to Article 34 of the Value Added Tax Proclamation No. 1341/2012 and Article 12 of the Council of Ministers Value Added Tax Regulation No. 510/2017, the VAT and Indirect Tax on income from games of chance are calculated on net revenue after deducting prize money. Consequently, all gaming companies are required to adjust their tax calculations and provide proof of payment for verification.
As a consultant who has actively promoted the Ethiopian gaming market over the past five years, I see this as a significant win. Despite strict regulations that have deterred many betting companies, a few international brands have recently entered the market.
Ethiopia boasts a youthful population—a major asset for growth. With over 41% of the population under the age of 15 and 28% aged between 15 and 29, the potential for expansion in this market is substantial.
While the country halted new license issuances last year to streamline its regulatory framework, sources indicate that new licenses will soon be available. Recent actions have seen over 80 licenses suspended due to illegal activities, indicating a move towards greater regulation and oversight.
For investors and operators in the gambling industry, Ethiopia is a market to watch. With ongoing reforms and a youthful demographic, it could be the next big thing in Africa’s gaming landscape.
