M-PESA Ethiopia Expands Into Tax Collection with Amhara Region Deal

Why It Matters

By digitising tax collection, the deal can boost revenue efficiency and broaden financial inclusion, while showcasing mobile money’s role in Ethiopia’s public‑sector modernization.

Key Takeaways

• Amhara first Ethiopian region to accept mobile tax payments
• Over 450,000 taxpayers can pay via M-PESA
• M-PESA Ethiopia active users rose 258% YoY to 5.2M
• Transaction value topped ETB 20.37B ($129M) in Q3
• Safaricom Ethiopia revenue up 54% to $74.7M

Pulse Analysis

Ethiopia’s tax administration has long relied on paper‑based processes, creating bottlenecks for both citizens and revenue bureaus. The recent partnership between M-PESA Ethiopia and the Amhara Regional State Revenue Bureau marks a decisive shift toward digital collection, promising faster settlements, reduced trips to offices, and more reliable record‑keeping. As the first regional authority to adopt mobile money for taxes, Amhara sets a precedent that could accelerate nationwide reforms under the government’s digital‑service agenda.

The mobile money landscape in Ethiopia is expanding rapidly. Safaricom Ethiopia’s Q3 figures show a 258% year‑on‑year increase in three‑month active customers, reaching 5.2 million users, while total transaction volume nearly tripled to 364.3 million and transaction value more than doubled to ETB 20.37 billion ($129 million). These metrics reflect strong consumer confidence in M-PESA’s convenience and its integration with the national payments switch, EthSwitch, which further streamlines cross‑border and domestic transfers.

For businesses and policymakers, the Amhara deal illustrates how mobile money can become a backbone for public‑sector finance. Faster tax payments improve cash flow for regional projects, while digital receipts enhance transparency and reduce leakage. The success of this pilot could encourage other Ethiopian regions—and potentially national authorities—to adopt similar solutions, driving broader financial inclusion, expanding the taxable base, and reinforcing Ethiopia’s trajectory toward a modern, digitised economy.